wealth mangment

8/2/2019 Wealth Mangment

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Wealth management


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It is also called private wealth management, concerns the high-

quality provision of a range of financial and related servicesto wealthy clients, principally individuals and their families. Typicallythe services on offer combine retail banking products such aspayment and account facilities plus a wide range of up-marketinvestment related services.

Market segmentation and the offering of high quality service

provision forms the essence of private banking and key componentsinclude:

tailoring services to individual client requirements

anticipation of client needs

a long-term relationship orientation

personal contact

Discretion

investment performance

o An important feature of the private banking market relates toclient segmentation.

o In India: Citi Private Bank, HSBC, RBS, HDFC Bank, etc.

PRIVATE BANKING


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CLIENT SEGMENTATION

CLASSIFICATION:oThe bottom end of the market is referred to as the mass affluentsegment (up to $300,000 of investable assets).oThe top-end of the market are often referred to as ultra HNWIs with

over $50 million in investable assets and in-between lie HNWIs($300,000 to $5 million) and very HNWIs ($5 million to $50 million

o

The structure of a segmentation model combined with the flexibility tomeet individual client needs is widely regarded as best practice inachieving a truly client-centric approach.oThe process of segmenting client is:


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Individuals or families who have at least US$50 million in investableassets, or with a disposable income of more than US$20 million.

A bank may wish to segment its market; the term "very-high-net-worth individuals can refer to those with assets between $5 millionand $50 million, with ultra-high-net-worth individuals only those with

above $50 million.

ULTRA HIGH NET-WORTH INDIVIDUAL(UHNWI)


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MASS AFFLUENT

Refers to a high end of the mass market.

It is most commonly used by the financial services industry to refer toindividuals with US$100,000 to US$1,000,000 of liquid financial assets

The mass affluent have been characterized as those who save more thanthey spend and invest for their future.

They often wish to leave an inheritance to their children.

The mass affluent will have between $500,000 - $1.5 million in investableassets upon retirement with a net worth between $500,000 -$2.5 million ofwhich they spend between $4,000 -$10,000 (USD) per month in retirement.

The mass affluent offer the wealth management industry high growthopportunities. I

Amongst 33 million individuals, representing around 43% of the countrysinvestable assets only 18% of the mass affluent are estimated to haveavailed financial planning services in US.


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Asia-Pacific is the fastest-growing wealth management

market in the world. This statement is backed up byplentiful evidence.

Indias growth in number of high net worth individualswas second fastest in Asia-Pacific, following Hong Kong.

A report: "Top of the Pyramid by CRISIL states that Mostsurprisingly its found in Indiathat UHNIs are not ahomogeneous group. They are Inheritors, Self-made,Professionals and despite their wealth, Indian UHNIs arestill driven by a value-formoney mindset.

Its expected that the share of alternate assets in UHNIinvestments will increase from 9.5 per cent in 2009-10 to11.2 per cent in 2011-12.

DID YOU KNOW


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OFFSHORE BANKINGBank located outside the country of residence of the depositor in a low tax jurisdiction

that provides financial and legal advantages

greater privacy

low or no taxation i.e. tax havens

easy access to deposits

protection against local political or financial instability

ADVANTAGES:

provide access to politically and economically stable jurisdictions

operate with a lower cost base and can provide higher interest rates

can help developing countries source investment and create growth in theireconomies

DISADVANTAGES:

less financially secure, remote and costly to visit

been associated in the past with the underground economy and organized crime,through money laundering

is usually more accessible to those on higher incomes, because of the costs ofestablishing and maintaining offshore accounts

Indian Banks with offshore units: PNB, SBI, etc
http://en.wikipedia.org/wiki/Tax_havenhttp://en.wikipedia.org/wiki/Tax_haven


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Family offices serve the very wealthiest clients, acting as an integratedhub for the familys financial administration.

They perform, essentially, three main functions:

a) specialist advice and planning (including financial, tax, strategic andphilanthropic)

b) investment management (including asset allocation, risk management,investment due diligence and analysis, discretionary asset managementand trading)

c) administration (including coordination of relationships with financialservices providers and consolidated financial reporting)

Family offices are particularly well developed in the US, but much less soin Europe.

HSBC Private Wealth Solutions, a unit of London-based HSBC HoldingsPlc private bank oversees $102 billion for families in 18 offices aroundthe world ranked as no1 in the list of top50 firms.

In India: HSBC, Kotak Mahindra, DSP Merrill Lynch, Barclays PLC, etc.

FAMILY OFFICE


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Family office covers anything that a client family may require from its own

office.Some of them are:

Private Wealth Management

Asset Reporting

Estate Planning

Wealth Protection Real-Estate

Alternate Asset Classes

International Investment

Administrative & Tax services

Financial Planning

FAMILY OFFICE


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Single-family office (SFO) (John D Rockefeller in 1882) Multifamily office (MFO): It was driven by single-family offices seeking

economies of scale, either by opening their doors to new clients orthrough mergers of single-family offices. The primary motivation fordoing so has been to spread the considerable operating costs of thefamily office over a wider base of clients and assets. It appeals to

clients who cannot justify having a single family office. It is rare to servemore than 12 families.

Multi client family office, or private investment office: These aredesigned to overcome some of the potential problems with multifamilyoffices, such as whether the original needs of the office meet those of

new clients. The private investment office avoids this issue by havingno attachment to a specific family. Examples include Lord North Street,Unigestion and Heritage Bank and Trust.

FAMILY OFFICE MODEL


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Presented by

Uma Lakhotia

Chitrak Pal

Raashi Choudhary

Vikas Lall

wealth mangment

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