1. The wealth management industry is growing very rapidly. Wealth management as an organised industry is growing in terms of both the number of players as well as the number of high net worth individuals in India. Wealth managers are aggressively marketing their services to existing and potential high net worth clients. With the number of clients growing, wealth managers are ramping up their capabilities to manage growing volumes of assets.

2. Clients are becoming increasingly sophisticated . Wealth managers in India believe that high net worth clients are becoming more sophisticated in their understanding and demands of wealth providers, products and services. Many need a relationship manager to proactively assist them in managing their wealth. Wealth managers need to ensure that they are equipped with specialist skills and experienced staff to handle sophisticated client needs.

3. There is a shortage of skilled and experienced wealth management advisors. The demand for trained and talented wealth management professionals is increasing as the industry continues to experience growth. Relationship managers are required to have a sound knowledge of a wide range of products and services across asset classes being offered to high net worth clients.

4. Most wealth managers have adopted an open product architecture. Most wealth managers are moving beyond in-house products and are distributing products and services sourced from other providers e.g. third party mutual funds, fixed income products etc. Wealth managers are focusing on their core competencies and outsourcing products and services to complement their in-house offerings eg real estate, art advisory, taxation advisory, etc.

5. Most wealth managers aim to be ‘trusted advisors’ to their clients. Open product architecture enables wealth managers to offer their services as a ‘trusted advisor’ to clients and offer unbiased wealth management services. A trusted advisor is capable of offering a comprehensive range of in-house and third party products and services and provision of proactive and objective advice based on in-depth financial planning.

In terms of their strategic orientation, most wealth managers that participated in the survey believed that they were already their clients’ trusted advisors or would be within the next three years. Most wealth managers focusing on the ultra high net worth segment are pursuing a competitive strategy based on differentiation. Other wealth managers focusing on the mass affluent segment are pursuing a cost leadership strategy.

6. There is relatively low usage of technology tools by wealth managers — IBM Business Consulting Services believes that technology plays a very important role in enabling the relationship manager to provide effective services to the customer. There is a need for systems, which provide a single view of the customer’s entire wealth portfolio with the wealth provider.

While most players provide a consolidated view through a combination of automated and spreadsheet applications, there are significant variations in their ability to provide online, real-time access. Additionally, as the mass affluent segment continues to grow in India, there is a need for online financial planning tools to assist this segment of clients, eager to be in control of their portfolio and active in selecting and/or validating their selection of products in line with their asset allocation strategy.

IBM Business Consulting Services undertook the second Indian Wealth Management and Private Banking Survey 2003-04 between Nov 2003-March 2004. This study was undertaken with participation from leading financial services players engaged in wealth management and private banking. The study focused on key areas encompassing market trends; client profile & behaviour; products & pricing and people and technology. The survey covered over 19 respondents, comprising 10 banks, five asset management companies and four broking firms.

IBM has been conducting a similar survey in India since 2001-02, in North America since 2000 and in Europe since 1993. These surveys have been regarded as leading benchmarking studies in the industry.