Wealth Management

Presented by:
Aditya Gadge
CEO Association of International Wealth Managerment of India
(AIWMI)

AIM of this lecture

To define the wealth management market & the
services.
Provide an idea of its size and recent growth
Examine the career opportunities in the wealth
management industry.
Describe the competitive landscape and the ways to
reach there.
Introduce CIWM Certification program as a gateway
to careers in Private Banking & Wealth Management

Entry Test

Definition of Wealth
Management & Private Banking
Wealth Management:
financial services provided to wealthy clients, mainly individuals and
their families , typically with $100,000+ investable assets
Private banking:
an important, more exclusive, subset of wealth management, typically
with $1 million + of investable assets.
Private banking traditionally consisted of banking services (deposit taking
and payments), discretionary asset management, brokerage, limited tax
advisory services and some basic concierge-type services, offered by a
single designated relationship manager. On the whole, private banking
relationships were mainly passive
Wealth management is broader and typically deals with managing both
the assets & liabilities side of clients balance sheets

Wealth Management Products

While asset management is a key feature, wealth management has a greater

emphasis on financial advice and is concerned with gathering, maintaining,
preserving, enhancing and transferring wealth.

Products include:
Brokerage.
Core banking-type products
Lending products, such as margin lending, credit cards, mortgages and private jet
finance.
Insurance and protection products, such as property and health insurance, life
assurance and pensions.
Asset management in its broadest sense: discretionary and advisory, financial and
non-financial assets (such as real estate, commodities, wine and art), conventional,
structured and alternative investments.
Advice in all shapes and forms: asset allocation, wealth structuring, tax and trusts,
various types of planning (financial, inheritance, pensions, philanthropic), familydispute arbitration even psychotherapy to children suffering from affluenza.
A wide range of concierge-type services, including yacht broking, art storage, real
estate location, and hotel, restaurant and theatre booking.

As we understand.
Wealth managers coordinate retail banking,
estate planning, legal resources, tax and
investment management .
Wealth managers can be an independent
Certified Financial Planner, MBAs, Certified
International
Wealth
Manager
(CIWM),
CFA Charterholders , etc.

Client Segments
Private banking targets only the very
wealthiest clients or high net worth
individuals (HNWIs): broadly speaking, those
with more than around $1 million in
investable assets.
Wealth management, by contrast, targets
clients with assets as low as $100,000, i.e.
affluent as well as high net worth (HNW)
clients.

Defining the Wealth

Management Service Proposition
The following three criteria differentiate a firm as a wealth
manager:
The relationship that wealth managers have with their
clients, both in terms of breadth (where providers
emphasise terms such as holistic, comprehensive and
all-inclusive) and depth (intimate and individualised).
The products and services provided, with a particular
emphasis on estate planning and multigenerational
planning services, as well as tax advisory expertise and
alternative investments.
The specific objectives of wealthy clients, such as
investment performance, wealth preservation or wealth
transfer.

Investment Mandates
Custodian for a clients assets. That involves,
essentially, asset safekeeping, income collection, fund
disbursement and associated reporting.
Execution-only mandate, the wealth manager
executes, or selects brokers to execute, securities
transactions on behalf of the client. Not investment
advice, service aimed primarily at self-directed
clients.
Advisory mandate
Discretionary mandate

Discretionary Mandates
The wealth manager usually has sole authority to buy and sell assets
and execute transactions for the benefit of the client, in addition to
providing investment advice.

Starts off with:

Construction of a brief with the client, detailing investment aims, level
of risk-aversion and other factors that will influence the portfolio (In
some discretionary accounts, the wealth manager is given only limited
investment authority). However, in all cases, major investment
decisions, such as changing the accounts investment strategy or asset
allocation guidelines, may be subject to the clients approval.
The wealth manager is generally paid on the basis of a flat-fee
arrangement linked to the value of the assets under management.
The gross revenue margin of a discretionary mandate is typically at
least double that of an execution-only mandate.

Investment Mandates & Clients

Wealth
The proportion of clients using advisory mandates is, in general,
relatively stable across the various client wealth bands.
Execution-only mandates become more prevalent the greater
the clients wealth
Discretionary mandates less prevalent, as client wealth rises.
Wealth management can mean different things in different
geographic regions.
In the US, wealth management is more closely allied to
transaction-driven brokerage and is typically investmentproduct driven.
In Europe, the term is more synonymous with traditional
private banking, with its greater emphasis on advice and
exclusivity.

Onshore & Offshore Wealth

Management
Onshore wealth management is the provision of products and services within
the clients main country of residence.
Offshore wealth management, by contrast, serves clients wishing to manage
their wealth outside their main country of residence for reasons such as:
financial confidentiality;
legal-system flexibility;
tax considerations;
the lack of appropriate products and services onshore;
a low level of trust in domestic financial markets and governments; and
the need for safety and geographical diversification in response to domestic
political and macroeconomic risks.
Some clients treat their offshore account(s) primarily as a vault.

Key Wealth Drivers Regional

Differences
Asia-Pacific: Strong economic development
Latin America: Traditional offshore-banking
stronghold
Middle East: Oil-driven growth
Africa: Commodity-driven growth

13

Main players

Pure private banks

Trust banks
Retail and universal banks
Family offices
Financial advisors
Stockbrokers
Direct banks
Asset managers
Investment banks
Others insurance companies, accountants, solicitors,
financial planners
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The Rich & Famous

The Ubiquitous Common Man

Does he require Wealth Management
services ?

 or do they require it ?

Hobbies of a common man

Hobbies of the rich &

famous

Black Jack
Golf
Ice Sculpting
Yachting
Polo
Collecting Cars

Some more

Skydiving
Flying
Deep-Sea Diving
Art
Buying Islands
Space Travel

Major financial focus area

for the common man
How to grow the income more than the growth
in inflation & expenses.

Three major financial focus

area for the HNI Client today
Preserve: How to transfer wealth to the next
generation ?
Grow: How to earn tax-efficient & inflationadjusted growth to secure the familys
financial future?
Give: What is the most efficient way for charity?

Family Offices

Highly successful families manage their wealth by working

with combinations of in-house professionals and third
party vendors in a family office.
A Single Family Office (SFO) is a private structure created
to oversee personal financial matters for family members
A Multi-Family Office (MFO) is a commercial enterprise
established to meet the investment, estate planning and,
in some cases, the lifestyle and tax service needs of
affluent families.

Types of Single Family Office

In an adminstrative family office, advisory and investment management services are

managed through contracts with external service providers. The administrative family
office typically directly employs staff to provide some level of bookkeeping, tax, or
administrative servicesoften on a part-time basis.
The hybrid family office keeps functions strategic to the familys objectives in-house,
and outsources nonstrategic functions. Some families hire family members for certain
strategic activities, when the family member has a demonstrated expertise or when privacy
and continuity of management are top concerns. In addition to administrative functions,
hybrid family offices employ experts in tax, legal and/or asset allocation.
The comprehensive family office is designed to provide services for families who
desire the maximum degree of control, security, and privacy. All functions, including
administrative, tax, legal, risk management, and core investment management, are provided
by in-house employees. Specialized investment management activities such as hedge fund,
venture capital, private equity, or emerging market investments may be sourced externally
depending on each familys objectives, budget, and their ability to recruit and retain such
talent.

Some of the Leading MultiFamily Offices in India

1.
2.
3.
4.
5.
6.
7.

Altamount Capital
Quant Capital
Client Associates
India Infoline Private Wealth
Karvy Private Wealth
ASK Wealth Advisors
Avendus Capital

Association of International Wealth

Managers
(AIWM

Based in Switzerland, Non-profit Association

established in 2007 to promote & strengthen
global education in private banking industry
Awards the CIWM Diploma : an internationaly
recognised
qualification
for
wealth
management experts
Offers private banking professionals platform
for high-quality education & international
networking

Association of International Wealth

Managers
(AIWM)
Association founded by:
AZEK , founded in 1990, the Swiss Training
Centre for Investment professionals
LawInContext, online legal & training service
created by global law firm Baker & McKenzie
Central Law Training(CLT), UKs leading
provider of postgraduate legal training &
course provider of renowned STEP Diploma
in International Trust Management.

AIWM Member Nations

Currently present in Switzerland,
France,
United
Kingdom,
Germany, Italy, Luxemburg ,
Hong Kong & Monaco.
Recently Launched in Asia &
Gulf region by AIWM India

Role of AIWM
Assists
graduates
in
acquiring
core
competencies in wealth management & in
qualifying for key positions within the industry
Established to set a globally recognised
standard for the qualification of wealth
management professionals
Facilitates clients access to first-class,
reliable and comprehensive advice & services.

AIWMs Objectives
To facilitate research & high quality education
in field of international wealth management
To
provide
internationally
recognized
certifications in wealth management & family
office(CIWM)
To create a forum for the interchange of ideas
and information in the finance and wealth
management field
To assist a world wide network of private
banking experts

AIWMI International
Alliances
1.
2.
3.
4.
5.

Family Office Group, USA

NUS Business School, Singapore
Family Office Exchange (FOX), USA
Campden IPI, UK
Society of Trust & Estate Practitioners
(STEP)

Conclusion
Wealth management & private banking business is
currently a major area for development for many of
the worlds financial firms
The market is large, growing and highly profitable
Industry is fragmented & there is no agreed single
preferred model

Queries

Thank You

Association of International Wealth Management

India (AIWMI)
Regus, Level 9, Platina, G Block, Plot C-59, BKC, Mumbai-51
Ph: 022 67000572 Mob: +91 997017972
Email: aditya@aiwmindia.com www.aiwmindia.com