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A Guide to Understanding Wealth Management in India

  • Author: sameer shaik
  • 5 min read
  • March 15, 2023
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What is Wealth Management?

Wealth Management is a funding advisory carrier that mixes different monetary offerings to cope with the desires of prosperous clients. Using a consultative method, the marketing consultant gleans facts about the patron’s needs and particular scenario, then tailors a customized method that uses more than a few monetary merchandise and offerings.

What does a wealth manager do?

Wealth managers generally provide financial services to the highly affluent and may have expertise in the types of financial questions that affect the ultrawealthy, such as how to reduce the estate tax. Many private wealth managers will coordinate with other financial experts  such as accountants or estate planning specialists  on behalf of clients to offer holistic financial advice.

How does Wealth Management work?

Wealth management encompasses both special financial services and financial planning. Various services that come under wealth management are estate planning, retail banking services, investment management services and legal and tax advice.

The aim of wealth management is to ensure sustenance and long-term growth of an individual’s wealth.

Example of wealth management

A few examples of wealth management include:

  • Retirement planning: A retirement plan provides a plan for your future financial security. It can help you assess your current financial situation and determine how much money you need to save for retirement.
  • Insurance planning: Insurance can help protect you from unforeseen events that could cause financial loss or hardship. A good insurance plan will help you secure your family’s future by providing coverage for disability income, life insurance, and long-term care expenses.
  • Asset allocation: This strategy involves investing in a combination of different asset classes, such as stocks, bonds, and cash, to reduce the overall risk on your investment portfolio.

What are the Advantages of Wealth Management in India?

  • Wealth management plans are tailor-made to patron-particular desires. The monetary merchandise is blended to attain the monetary desires of the patron efficiently.
  • The advisory offerings entail the managing of patron touchy facts. Investment advisors should preserve the confidentiality of facts received during monetary-making plans and advisory offerings.
  • A wealth management marketing consultant uses numerous monetary disciplines, including monetary and accounting, tax offerings, funding recommendations, felony or property-making plans, and retirement-making plans, to manage a prosperous patron’s wealth as a package deal of offerings.
  • It practices and the corresponding offerings may also fluctuate from one place to any other, relying on the kingdom of the economy, according to capita earnings and the saving conduct of the people.
  • Wealth management is different from funding recommendation. The former is a different holistic technique wherein an unmarried supervisor coordinates all of the offerings had to manage their cash and plan for the patron’s desires, which include the contemporary and destiny desires of the patron’s family.
  • While maximum wealth managers offer offerings in any monetary field, sure wealth managers focus on particular regions of finance. The specialization could be primarily based on the wealth supervisor’s location of information.
  • Wealth management offerings are typically suitable for wealthy people who have a wide array of numerous desires. The advisors are high-stage experts and experts.
  • Wealth managers may match, in my view, as an unmarried person, a part of a small-scale enterprise, or a part of a more prominent company. Based on the character of the enterprise, wealth managers may also be characteristic below specific titles, which encompass monetary representative or monetary adviser. A patron may also acquire offerings from an unmarried distinctive wealth supervisor or may have to get the right of entry to the individuals of a distinctive wealth management team.

Types Of Wealth Management in India

  1. Financial Planning: This sort of wealth management advises you on financial choices depending on your resources in order to achieve your short-term plus long-term financial objectives. Financial professionals can assist you plan, invest, plus save for retirement, filing taxes, and doing other things.
  2. Asset Allocation: This sort of wealth management is concerned with developing an investing strategy focused on your financial objectives and ability to tolerate risks. The idea is to weigh risks and returns and then alter the proportion of assets appropriately.
  3. Asset Management: As the name implies, this sort of wealth management involves handling your financial affairs. Asset managers help you achieve your financial goals by assisting you in purchasing stocks, bonds, and funds and then tracking them for you. Asset management varies from asset allocation in which asset allocation prioritizes higher-risk, higher-reward investments over asset management.
  4. Estate Planning: This sort of wealth management emphasizes creating a plan to oversee your estate in the event that you become disabled or die.
  5. Tax Accounting: Tax returns and payments are the emphases of this sort of wealth management. Tax accountants will assist you in determining what deductions you may make so that you owe less when tax time arrives, as well as assist you with any taxes that may be problematic owing to investments you’ve made.

Private Wealth Management Services For Individuals

HNIs in India and worldwide are the most inclined to seek out wealth management services. Most HNIs have intricate investments, particularly offshore holdings, that demand expert advice, like the one given by expert wealth managers. Individuals’ wealth management services often comprise the following features:

  • Derivatives risk management
  • Investment in Venture Capital 
  • Stock Option Investing Planning
  • Real Estate Investing

Also with the rise in wealth of the world’s top 1%, HNIs have begun to expect more individualized service, prompting many companies to establish specific departments devoted to customizing wealth management services for their elite and richest customers.

Wealth Management FAQs

Which are the top wealth management companies in India?

The following are the top wealth management firms in India:
1. Angel Broking
2. Centrum
3. Avendus
4. Bajaj Capital
5. Kotak Wealth Management

Do wealth management companies charge a hefty amount of fee?

Yes. The amount charged by wealth management services is relatively expensive since the investor’s investment portfolio is tailored specifically. In addition to the predetermined fee imposed on the upfront investment amount, these wealth management services retain a portion of the profits made as an extra service charge.

Who should opt for Wealth Management Services?

Wealth Management businesses can provide financial planning to HNI investors that want tailored financial solutions and want to engage in a diverse variety of asset types.

Is availing of Wealth Management Services risky?

Yes. Although your portfolio would be tailored by a group of experts based on your risk tolerance and investment objectives, the danger of negative return remains due to market instability and its impact on various investment vehicles.

What is a wealth management app?

The creation of wealth management software entails building a solution that allows customers to track their income and spending. Budgeting is simply one of a wealth management app’s primary functions. Wealth apps also provide much more, such as advice on where to invest more wisely or how to boost savings.

Is financial planning part of wealth management?

Definitely not. Financial planning and wealth management are two different things. Wealth management is exclusively concerned with currently collected wealth and how to protect and expand it. A financial plan, on the other hand, creates a detailed blueprint focused on your financial goals and aids in wealth growth.

How much money do you need for wealth management?

The amount of money required to engage with private wealth management varies depending on the business and the manager. 

What are the different types of wealth management?

Nowadays, there are three primary categories of wealth management service providers: banks, brokerage firms, and boutique advice organizations. Banks have a broader investment distribution strategy, implying that they focus on a larger investment portfolio. They serve clients in the mid-level market as well as HNWIs.

What are the steps of wealth management?

Wealth management is a multi-step process that includes:
1. Obtaining financial information
2. Setting financial objectives
3. Portfolio auditing and analysis
4. Advising on a financial plan
5. Putting the strategy into action
6. Plan monitoring and reporting

Is wealth management for rich people?

Wealth management, due to its comprehensive nature, is often restricted to persons with at least a substantial net worth.

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