Private wealth….the wealth of private clients.
The term ‘private client’ implies there is something private about them. The term has become synonymous with ‘high net worth’ investors. They are different from ‘individual or retail investors’ who may need help with making financial decisions. They are also different from institutional investors, which are sophisticated but may be slower because they usually manage money on behalf of others. Private clients are unique – they may have the wealth and sophistication of a small institutional investor, but are much quicker to make decisions because it’s their own money. They don’t have to do insane amounts of paperwork and present to investment committees to invest. They are the ‘smart money’.
Since India was amongst the richest places in the world, there was always some ‘old money’ in India. These blue blood private clients may have been banking with Swiss private banks for generations. But once India opened up in the early 90s, the number of well-heeled ‘new money’ Indians grew exponentially, and spawned the private wealth management industry by the turn of the century.
About 20 years into this journey, let’s take a look at how far the Indian private wealth management industry has come. Some hits, some misses. Many foreign players came and left. Many new homegrown companies got launched. Many have yet to reach a sustainable scale.
In this inaugural issue, we speak to many veterans in the industry and explore what they see as opportunities and challenges. We attempt to size the market, look at the value proposition the industry is offering, flag some issues they may want to deal with. In future issues, we will also speak with private clients themselves. For now, let’s see what the industry’s self-assessment is.
The private client, and hence the private wealth management industry, is important in the bigger picture of ‘investing in India’ too. India needs to invest hugely in various parts of the real economy to lift the well-being of all Indians. We will cover many asset classes in future issues. As owners of a big portion of India’s wealth, private client investors will probably supply this capital. So it’s imperative that we understand what drives them.
I present to you – the private wealth issue.
For the full collection of articles on private wealth, check out https://www.moneymanagementindia.net/theprivatewealthseries/
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