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Submitted to : Mrs. NEERA CHOPRA

Submitted by RAHUL KHETAN SEC-1 B.Com (H) FINAL YEAR Roll No. 5115



I, Rahul Khetan, Hereby declare that the project work Wealth Management is based on my true understanding of the subject and has not been copied from any published source or website.

Signed_______________ Date ________________ (Candidate)


I would like to thank Mrs. Neera Chopra for guiding me in the completion of the project Wealth Management, without his help this project would not have been possible for me.

Rahul Khetan
Section-1 Roll No. 5115 B.com (H) Final Year

Introduction Need for Wealth Management Process of Wealth Management Strategies of Wealth Management Wealth Trends in India Scenario of Wealth Management services in India Conclusion Bibliography 5-6 7-8 9-11 12-14 15-17 18-27 28-29 30


Wealth Management is a term that originated in the 1990s in the US with the Broker Dealers, Banks, and Insurance Companies. Wealth Management has generally evolved from high net worth financial consulting for persons who are top clients of any firm, to a high level form of private banking that provides various types of investment, insurance and bank products and services. Wealth Management is an advanced investment advisory discipline that incorporates financial planning and specialist financial services. The key objectives are to provide high net worth individuals and families with tailored retail banking services, estate planning, legal resources, taxation advice and investment management, with the goal of sustaining and growing long-term wealth. Whereas financial planning can be helpful for individuals who have accumulated wealth or are just starting to accumulate wealth, you must already have accumulated a significant amount of wealth for the wealth management process to be effective. Examples of wealth managers include independent advisors like FFR [2] or large corporate entities like Citibank's Citigold and other extensions of retail banking services designed to focus on high-net worth retail customers. Such customers would be called internally in a bank 'mass affluent' or 'upper retail' clients because of their net worth, the number of potential products they own from the bank, their assets under management and other methods of segmentation. The banks create separate branches, services and other 'benefits' to retain or attract these customers who are typically more profitable than other retail banking customers. However, wealth management clients are not Private Banking clients because they simply do not have the Net Worth or Assets under management to justify the level of banking services that Private Banks provide. The financial wealth of High Net Worth Individuals (HNWIs) worldwide grew from US $37.2 trillion in 2006 to US $40.7 trillion in 2007, a growth rate of 9.4%. For the same period, we saw the total number of HNWIs increase from 9.5 million individuals in 2006 to 10.1 million in

2007 according to the 12th annual Capgemini-Merrill Lynch World Wealth Report. Over the last 3 years, we have seen double digit growth in emerging markets and strong overall net growth in HNWI wealth in mature markets. However, given the increased competition in the market and the financial challenges firms have faced, there is less room for error when making strategic market entry decisions. As a result, wealth advisory firms are seeking ways to enter growth markets but are getting back to basics.


Because you have a lot more to manage than just your wealth

Income and Lifestyle

Through an in-depth discovery process your Financial Advisor will work with you to understand and document what you want to do in this lifetime, from now until retirement and from then on. He'll then map out a course to help you seek the returns you'll need for how you intend to live and to achieve the income you'll need to do exactly what you want one year at a time.

We view borrowing as a strategy an array of ways to unlock value in assets you own, without compromising the ability of those assets to continue to work for you over time. If such talk of strategy sounds like how most firms talk about investing, it should. We believe how people invest and how they borrow are inextricably linked both sides of one balance sheet, one plan.

Asset Protection
By understanding the lifestyle you enjoy, and the one you're building toward, your Financial Advisor can see the threats against it taxes, inflation, volatility, creditors, lawsuits, identity thieves, tragedy and help you deal with them using everything in the arsenal of one of the world's largest financial services firms.

Wealth Transfer
Your Financial Advisor will approach your plan for wealth transfer from a wider angle than a traditional estate plan. He works with you to understand your definition of a rich life, then craft a plan to help you lead it and pass on what you see as most important to the next generation. This might mean a passion for education, or a sense of obligation for each generation to help give the one that follows a leg up in life, or both. It could mean protecting a work ethic and thirst for accomplishment, or protecting your family's bonds of affection toward

one another. Whatever it is, it should start with your definition of a rich life.

Investment Management
We believe that your plan for your life is the most important part of investing. Little things...like when you plan to retire and when you secretly hope to retire. The business you'll open when you do. How much you'd like to travel. And the aging parent who will need to move in with you in the next few years. Investing with your Financial Advisor is based on the simple yet powerful premise of wealth management: Your investments and your life are uniquely intertwined. Whether by design or by accident, they are all part of one plan. We advise that it be by design.

Business Strategies
As you lead your business toward its next stage whatever that stage may be you'll be pleased to learn that your Financial Advisor understands the connection between your business and your life. They are one and the same. From our standpoint, it's simply a matter of treating your business like it's the biggest investment of your life, if for no other reason than that it is.


Merrill Lynchs disciplined, four-part Wealth Management Process provides the framework to deliver a customized, high-value experience to clients, bringing all aspects of their financial life together to create, build and protect their wealth.

Step 1: Establish Objectives Work closely with clients and prospects to assess their total financial picture, helping them identify and prioritize their short- and long-term goals and gain an understanding of their risk tolerance. Step 2: Set Strategy Assist clients in developing an asset allocation strategy that will guide them toward their goals. The strategy should take into consideration a clients investment objectives, risk tolerance and time horizon. Step 3: Implement Solutions Propose investments and solutions consistent with a clients strategic asset allocation and financial goals. Step 4: Review Progress Meet periodically with clients to review their objectives, strategies and performance to assess their ongoing ability to achieve their financial goals.


The financial advisors adopt a comprehensive approach of providing an array of financial services to their clients. Through their Wealth Management Consulting process, they coordinate investment planning, financial planning and estate planning services by addressing four primary areas:

Creating and Growing Wealth Protecting and Preserving Wealth Planning for the distribution of wealth during life in the most tax advantaged way

Planning for the distribution of wealth at death in the most tax advantaged way

The Wealth Management Consulting approach can be split into two primary components investment planning process and financial planning process. Once appropriate investments have been selected, the focus turns to addressing the financial planning side of the equation. After the investment plan has been designed and implemented, the financial advisors remain your long-term partner by providing ongoing monitoring of your investment portfolio and periodic assessments of the plan to assure that it continues to be appropriate moving forward.


This unique process allows them to provide an unparalleled level of service for their clients. The end result is a complete, customized plan that is designed to meet your long-term financial goals.


Wealth Management Strategies

In todays society, it is not unusual to hear of younger generations destroying inherited wealth that took several generations to build. With the variety of investments available for investors today, however, is it really that difficult to preserve wealth? There are currently over 5,500 offshore funds to choose from. In fact, the choices available to international investors are virtually limitless. The difficult question is what investments are the right mix for the investor - be it mutual funds, stocks, bonds, derivatives, real estate or some other investment.

Wealth creation strategy If the investment objective of an individual is to create wealth, the portfolio mix should be more aggressive in nature. This first generation strategy would be similar to that followed by investors under the age of 40 who are in their most productive years. Typically, the strategy would involve taking on more risk for an equally higher return. A sample portfolio might resemble the following: 15% Large Cap Equity 35% Small Cap Equity 40% International Equity 10% International Bonds Annualized returns for this group normally range from 12% to infinity. A word of caution though, only go for the very high returns if you can stomach the sometimes wide ups and downs of the investment. At this stage in the investment process, it is important to get professional investment advice. With the strategies of a good asset, investment or money manager, the investors dollars will start to work early during the savings period. The time-tested tool called word of mouth still seems to be King of the hill when trying to find a good investment manager. However, as we approach a new millennium, look for technology to play an increasing role in assisting investors with this selection. The Internet is already giving magazines and trade newspapers a run for their money when it comes to highlighting the top money managers. Investors should examine the five and ten year history of the investment manager and check for things like


investment performance to determine whether the assets under management are rising. Wealth transfer strategy Upon the creation of wealth, it is often necessary to develop a strategy to transfer that wealth to the next generation. In an offshore context, this can be facilitated with a simple International Business Company (IBC). It is, however, recommended that the IBC have an attached trust, to ease the transfer of the IBC assets to the second generation. At the wealth transfer stage, the investment strategy would resemble that of an investor in the 40-55 year age group. What does this mean? Basically, the strategy requires that investments concentrate on reducing risk relative to that undertaken to create the wealth, while still seeking an annualized return between 10% and 15%; in short, a balanced or conservative growth portfolio. This type of portfolio might be distributed as follows: 15% Large Cap Equity 15% Small Cap Equity 20% International Equity 20% Bonds 15% International Bonds 15% Money Markets Mutual funds are a good choice at this stage. The advantages are clear: professional asset management and diversification. The diversification of risk may focus on such areas as currency, investment sectors, investment products and region or country. There are many offshore mutual funds in the balanced and growth categories that reduce the risk of a wealth creation strategy, while still offering stable returns. To further manage risk, most investment professionals will advise their clients to keep at least 30% of their investments in a hedge fund. It is also important for second and third generation investors to keep in mind the hard work and dedication sacrificed in order to build the wealth. This practical check of constant reflection may go a long way to ensuring an awareness of the importance of investment decisions.


Wealth preservation strategy It is the preservation of wealth in the third generation that can sometimes create the greatest challenge. Preserving wealth can be difficult for the simple reason that those making the decisions in this era did not have to make the sacrifices necessary to create the wealth. For many, the money was always there and, as far as they are concerned, it will always be there. Unfortunately, this is not always true. It is crucial that all investments at this stage have minimal risk, seeking a return of between 8-14%. The investments at this stage should be similar to the investments of an individual in the 55+ age group. This would favour an investment policy geared towards income generation, while making a return well above the inflation rate. A model portfolio might have the following distribution: 20% Large Cap Equity 10% International Equity 25% Bonds 25% International Bonds 20% Money Markets Conclusion A tip for the wise: Focus on mutual funds in the second and third generations to further diversify risk and asset allocation. Remember as well to include a hedge fund that typically performs very well when traditional stocks take a beating. In addition, the costs of hiring a professional asset manager via a mutual fund can be much less than if you tried to do the same thing as an individual investor. It all goes back to the benefits of economies of scale. These strategies will ensure that the cycle of create, transfer, and loss will be converted into a positive cycle of create, transfer and preserve.



According to the Barclays wealth report regarding the Global wealth trends 2007-2017, the most important development over the next decade would be the rapid escalation in the household wealth in the key emerging markets of China, India, Russia and Brazil. In 2007 only China makes to the top ten wealthiest countries in the world in their household wealth index. By contrast, in 2017, India will have moved to 8th position and Russia and Brazil will claim 11th and 12th positions. In less than two decades, India has been transformed from a slowgrowing agrarian country into one of the worlds most dynamic economies. Gross Domestic Product (GDP) has grown at an average of more than 8 per cent annually over the past three years and by 8.7 per cent in the most recent fiscal year, making India the second-fastest-growing major economy in the world. This economic boom has led to an unprecedented level of wealth creation. India also has one of the fastest-growing affluent markets in the world. Although the country starts from a very low base, our Household Wealth Index suggests that there will be 411,000 households with wealth in excess of US$1 million in the country by 2017. The numbers of mass affluent, with wealth over US$500,000, is expected to rise from a negligible figure in 2007 to 1.9 million by 2017. In recent years, the Indian stock market, which has seen a five-year bull run, has generated significant wealth. The Bombay Sensex Index has risen sixfold over the past five years, and climbed by 47 per cent in 2007. There has been a run of IPOs on the back of this: 237 over the past three years, according to figures from Ernst & Young. Some 25 per cent of Indian billionaires have made their fortunes through IPOs, according to Business Standard, an Indian newspaper. Indian industrial families have often been beneficiaries of these IPOs. Indian industrial families are unusually global in outlook, says Mr. Aquilina, head of international Private Banking at Barclays Wealth. It is not unusual to see family enterprises spread across the world with family members in Kenya, Canada, the UK and so on. They draw great strength from their ability to bring together and share ideas and expertise, and to benefit from collective knowledge, he says. Selfmade entrepreneurs have also benefited from these IPOs, with Indian entrepreneurship on the rise. A wave of successful, high-growth businesses grew up around the software industry, says Professor K. Ramachandran of the Indian School of Business. But this entrepreneurial spirit has not been limited to the software industry. 16

People are generally more confident and optimistic about the possibilities of building their own businesses. We are also seeing a trend where members of industrial families are setting up new businesses, often diversified. These businesses start with favourable access to capital, social and support networks.

COUNTRY OUTLOOK - INDIA 2007 Ranking in Household Wealth Index Total net wealth as a percentage of GDP 14 224 cent 2017 8 per 264 per cent 411,000 1.9 million 29 million 0.2 per cent

Number of high net worth households with Negligible overall wealth in excess of US $ 1 million Number of high net worth households with Negligible overall wealth in excess of US $ 500,000 Number of high net worth households with 2.1 million overall wealth in excess of US $ 100,000 Percentage of households with overall wealth Negligible in excess of US $ 1 million (ranking) Wealth held by high net worth households with Negligible wealth in excess of US $ 1 million Average net worth per household US 12000

US $ trillion


$ US $ 57000

As in many emerging markets, the wealthy in India have historically kept much of their wealth in tangible goods. Recent research by McKinsey reveals that Indian households hold more than half of their savings in physical assets like land, houses, cattle and gold. The latter has always had pride of place among Indians, who are the worlds largest consumers of gold. Recent estimates suggest that the population owns US$200 billion in gold, equal to nearly half of the countrys bank deposits.


More recently, affluent Indians, in keeping with the preference for tangible investments, have been investing in the Indian property market. Indian real estate has generated stellar returns on the back of low interest rates, strong demand and a huge influx of investment from sovereign wealth funds and Middle East investment groups, among others. Our research shows that property currently accounts for around 43 per cent of overall household wealth in India. There has been a widespread investment in Indian real estate by all sectors of the affluent community, says Professor Ramachandran. You would be unlikely to come across a wealthy Indian today who does not have a strong presence in real estate. Indias financial markets have expanded and deepened in recent years, according to research by the McKinsey Global Institute. The countrys financial assets stood at US$1.8 trillion in 2006, more than double its GDP a higher ratio than in Latin America, Eastern Europe or Russia. Compared with other emerging markets, there is a very strong allocation to the equity markets among retail investors in India. Our research shows that around 69 per cent of household financial assets are allocated to equities, compared with 25 per cent to cash. The proportion allocated to equities has increased gradually in recent years, from 60 per cent in 2004 to its present level of 69 per cent. Although Indian financial markets are maturing, many affluent Indians have yet to take on board more conventional ideas of risk and diversification. Catherine Tillotson, Head of Research at Scorpio Partnership, points out that many affluent Indians, who see themselves as low risk investors, often have concentrated risk patterns due to their heavy exposure to local equity markets. With stock markets historically achieving 40 per cent rates of return, it has been hard for investors to really consider diversifying by looking at other markets, she says. Perceptions of risk are very different when you have been used to achieving 40 to 50 per cent growth rates every year. Longer term, Indias economic prospects look rosy, although there remain obstacles to growth, including poor infrastructure, trade barriers and a shortage of skilled labour. Indias increasing integration into the global economy, favourable demographics and improving levels of productivity augur well for the continuing rapid growth of the economy.



Opportunities to increase revenue are scarce in the current economic environment, leading many financial institutions to contemplate forays into wealth management as a way to generate new top-line growth. Some firms already have an affluent customer base that they assume can be easily converted to a wealth management offering, while others recognize that theyll have to attract new clients to their institutions. Whether firms choose to set their sights on traditional or new customer segments, creating a robust wealth management offering isnt a simple matter. Successful firms will carefully analyze their target customer segments, realistically assess their own strengths and weaknesses, and monitor and respond to actions of their competitors. Firms must also consider how technology can lower the cost to serve previously unprofitable segments. The recent market downturn notwithstanding, a substantial amount of old and new wealth, needs managing. Factors like increased volatility and uncertainty, the growing number and complexity of financial products available, and increased personal responsibility for retirement planning have made many previously confident investors realize that they do, in fact, need advice. This demand, along with attractive industry returns, has many firms considering entering the wealth management space. However, a history of impressive returns in the wealth management market does not mean that every firm can play in it profitably. Entry into the wealth management arena holds no guarantee of high returns. If wealth management firms have traditionally targeted only the wealthiest customer segments, it is because only the wealthy can afford the high level of service traditionally provided. High net worth (HNW) clients demand a superior level of customer service and expect their advisors to have specific and extensive expertise; experienced advisors, in turn, expect their compensation to reflect their abilities. For firms looking to tap the existing wealth management client base, this level of service creates customer brand loyalty that can be difficult for even the most competitive firms to surmount. If price were no object, everyone would welcome a financial advisor. In reality, however, the cost to provide comprehensive financial planning and the expected level of customer service that accompanies it is high. Firms must balance the customer value proposition with profitability, delivering the right offering to the right client segment at the right price. Technology helps in two ways: it enables the advisor to be more efficient and serve more clients, and it makes self-service more plausible, offering firms an opportunity to expand the wealth 19

management market by reducing the cost of providing quality advice and service. Before embarking on an ambitious and expensive wealth management effort, firms should consider the needs of the customer segment they are trying to target. Designing an offering that matches the competencies that attractive segments value to the firms capabilities is the key to successful wealth management.


Beyond products and services: Five competencies, five chances to differentiate

The following five competencies address customer needs that enable firms to create sustainable competitive advantage in attractive customer segments. Advisory relationship The core of any successful wealth management offering is the relationship developed between the advisor and the client. Successful advisors develop a relationship with clients by demonstrating that the clients interests are the advisors paramount concern. In the context of an advisory relationship, the wealth management firm can work with the client to develop, implement and monitor a comprehensive wealth management strategy. Integrated information Very few clients maintain all of their accounts with a single provider; an integrated view of their overall financial picture is critical if clients are to be able to make informed decisions. Advisors, too, should be able to access and analyze customer data efficiently. When information is automatically integrated across accounts and across institutions, advisors can concentrate on helping customers make fact-based and insightful wealth management decisions, rather than focusing on more mundane tasks like assembling statements from multiple sources. Multichannel access Customers want the ability to access their account information when they want, how they want and where they want. The combination of integrated information and multichannel access empowers clients by enabling them to access constantly updated, accurate information, whether in person, over the telephone or online. Perception To win new customers and retain existing ones, wealth management firms must be perceived as competent, dependable and empathetic. Clients must also perceive that they are paying a justified price for the value that they are receiving. Client opinion is formed through a combination of personal experience, word of mouth and marketing. To compete effectively, the firm must have a brand that is firmly associated with the qualities demanded of a wealth management institution.


Personal touch A major component of successful wealth management offerings is human touch. Clients respond to charismatic guidance and a high level of attention; they feel valued when their queries are addressed promptly and personally. Firms that go above and beyond expected levels of service will reap substantial rewards. The key consideration as firms extend wealth management offerings to customer segments with fewer assets is balancing the cost to serve with the revenue opportunities associated with a particular client. The challenges all institutions will face in developing viable wealth management offerings can be grouped into the areas of customer strategy, operational effectiveness, organizational design and technology strategy. While retail banks will face some of the same core challenges as other players, the following challenges are particularly pertinent to banks:


Challenges for retail banks developing wealth management offerings.

BUSINESS AND CUSTOMER STRATEGY Identifying and migrating appropriate customers from banking services tomore lucrative wealth management services Overcoming negative image in advisory capabilities and ability to provide best-of-breed investment products Assessing the viability of providing a wealth management offering to the mass affluent ORGANIZATIONAL DESIGN Breaking out of silos to transition from a product-centric to a customer centric organization Integrating different components of offering to provide a single point of contact for clients Creating an environment that is focused on customer service OPERATIONAL EFFECTIVENESS Building or partnering to offer more complete asset management, retirement and estate planning and protection capabilities Leveraging physical footprint Ensuring more rigorous adoption of know your customer rules TECHNOLOGY STRATEGY Improving customer relationship management (CRM) implementation to enable the identification of potential wealthmanagement clients and provide an integrated view of customer information across all product groups Using technology as a platform for serving the mass affluent Improving information and data exchange to share information across silos Integrating legacy and new systems


The traditional wealth management provider

The capabilities of private banks and trust companies and independent advisors match up well with the needs of the traditional wealthmanagement client base. These providers are characterized by strong personal touch and perception competencies, complemented by robust advisory and retirement and estate planning skills. To remain competitive, these firms should align their strategy to that of a traditional wealth management provider. Such firms employ proven means to offer comprehensive wealth management services to the top-tier customer segments, the UHNW and HNW. Firms already operating in this space have a distinct and wellestablished lead over potential new entrants. By continuing to focus on the wealthiest customers, they take full advantage of their established reputations and relationships and reduce the degree of organizational and infrastructure change necessary to stay competitive. By deciding not to go down market, they avoid diluting their brands. That said, many established firms will face declining margins as new competitors enter the marketplace and will need to attract the new generation of wealthy as the traditional wealthy client group transfers wealth to younger generations. Firms considering entry into this already crowded market must carefully consider what it will take to be successful. Not only must new entrants create a comprehensive suite of wealth management products, they must package these around the rare talent that can build a core advisory relationship with a demanding customer segment and supply a new level of customer service that most established firms are unaccustomed to providing.

The expanded wealth management provider

Mega groups, brokerages and retail banks, match up well against the needs of the affluent and young affluent. The affluent particularly value the wide breadth of product offerings of the mega groups and their relative strength in planning for retirement; the young affluent value the strength in multichannel access displayed by retail banks and the leadership role brokerages have taken in adopting new technologies. The role of expanded wealth management provider represents the best route for most mega groups, retail banks and brokerages. While these firms typically have a wide client base overall, they lack an existing wealth-management offering dedicated to the client base in the HNW and UHNW customer segments. By using


technology to expand down market to serve the needs of the affluent and young affluent, these firms have the potential not only to increase their potential customer base by a factor of four,6,7,8 they can also establish important relationships with potential HNW customers before they are targeted by traditional wealth management providers. However, these firms face a range of challenges specific to their individual capabilities. Brokerages will have to broaden their product offerings, mega groups will be forced to address significant gaps that exist in integrated information and tax planning, and retail banks, especially, face an uphill battle. They must significantly improve the competencies of perception and personal touch, as well as offer stronger protection and tax planning products to successfully provide a comprehensive wealth management solution. While there are clearly opportunities and profits to unearth with down market offerings, the challenge is how to serve the corresponding customer segments profitably. Because no one has yet done it well, expanding down market is a high-risk strategy. On the other hand, a down market strategy specifically highlights and attacks the critical competencies that make this business costly for traditional providers.

The best of breed manufacturer

A narrow focus on specific products and a lack of strong competencies limit the strategic options for all but the largest and most clientfocused insurers and asset managers. Building an entirely new set of capabilities and competencies is risky, and firms might be better served by focusing on their core manufacturing competency. A best of breed manufacturer strategy provides the greatest chance of success to the bulk of asset managers and insurers. For these firms, competition in the wealth management space should center on the design of new and innovative products and distribution through the firms that own the primary advisory relationship. Insurers and asset managers can choose to compete on the basis of scale or by distinguishing their products with value-added services. Either way, forming partnerships with primary advisors is critical to achieving success as a product specialist. Developing new and innovative products to address the evolving needs of clients at a segment-specific level is also critical.


The constant forward march of technology is opening new markets in wealth management. The automation of business intelligence, an increasingly connected distribution network and advances in CRM are reducing the cost to offer clients comprehensive wealth management services. This reduction in costs furnishes non traditional providers with an excellent entry point into the wealth management space. However firms decide to approach the wealth management market, their strategy must be appropriate to their capabilities and the customers they want to serve.


Where does your wealth management strategy stand?

Figure below lists important questions and key determinants for success that all firms should consider as they construct their wealth management strategy. ROLE IMPORTANT QUESTIONS

Key determinants for successful wealth management strategy Focus on providing a comprehensive wealth management offering to the UHNW and HNW segments; create products packaged around the advisory relationship. Develop a comprehensive strategy for capturing intergenerational wealth transfer.

Traditional wealth management provider

Expanded wealth management provider

How will you differentiate your offering in an increasingly crowded market? How will you defend current profit margins against the competition? What is your strategy for filling your business pipeline? Your customer base is increasingly diverse; how will you serve it best? Who will you recruit to serve your customers? How will you retain the talent you do find? What is your current process for retaining assets passed on to next generations?

What is your strategy for profitability in down market segments? Will you build or buy the technology platform necessary to serve down market

Build a comprehensive solution for traditional, affluent and young affluent segments; create offerings packaged around


clients? Your customer base is increasingly diverse; how will you serve it best? Who will you recruit to serve your customers? How will you retain the talent you do find? 1If you are already serving the wealthiest segments, how can you protect your brands strength as you move down market? What is your strategy for forming partnerships with primary advisors? Are you designing innovative products targeted to specific segments? Will your firm compete on scale or through product differentiation? How will you encourage advisors to sell your products?

the advisory relationship. Take a segmentspecific approach to wealth management: UHNW/HNW: personal touch. 1) Affluent: personal touch + technology. 2) Young affluent: Use technology as primary interface to 3) provide highquality advice. Develop new and innovative products that address segmentspecific needs in one or two areas; products should also be advisor friendly. Shift the corporate mindset to that of a solution provider that packages advice around products (if competing on value added services).

Best-ofbreed manufacturer


As the number of high net worth individuals has continued to rise in the major economies around the world, so has the demand for wealth management services. The private wealth market is a growing one for financial institutions and firms of advisors able to offer wealth management services that meet the demanding requirements of wealthy investors. Increasingly, high net worth individuals look for diversification in their investments to obtain the returns they need to protect and grow their wealth. To draw up the investment strategies their private wealth customers require, wealth management professionals need access to comprehensive coverage of the global financial markets and to the news which affects them. They look for services that enable them to find and filter information quickly and build personalized displays. They also seek purpose-built tools and models to help them analyze instruments, sectors, funds, indices or economic conditions and test the level of risk versus return of proposed investments. To perform, wealth management professionals need advanced portfolio management systems that allow them to analyze their private wealth customers' portfolios, value them in a range of currencies and measure performance. Wealth management professionals want portfolio management systems that automate administrative functions so that they can spend more time developing good relationships with private wealth customers. Effective portfolio management systems enable wealth management professionals to generate customized reports for customers and colleagues. They also give private wealth customers the means to access their own accounts directly so they can view their portfolio valuation, transaction history or cash position. Wealth management professionals need to be able to trade quickly to respond to market conditions. They therefore want portfolio management systems that provide access to order entry functionality and market information from a single interface. They look for functionality that allows them to route orders to multiple venues, so they can achieve best price and execution, and lets them track the progress of their orders. They also want portfolio management systems that enable them to feed order information into in-house systems to facilitate trade management.


Reuters offers a range of products tailored to the needs of wealth management professionals. They provide access, from a single platform, to everything they need to operate effectively and support their private wealth customers.


1.http://www.ml.com/about/press_release/051420012_net_worth_pr.htm 3 www. wikipedia.com 4 Services/PSI Global, 1999. 5 IBM Institute for Business Value analysis.