Wealth Management refers to a basket of services that help High Net Worth (HNW) individuals like you to plan, manage and make use of opportunities to grow your wealth / assets and pass it on in the manner you wish. These services are essentially geared towards three goals – protecting, managing and growing wealth.
Here we will take a broad look at the services offered under the Wealth Management umbrella –
Evaluation services
- Also known as investor profiling this includes understanding your risk tolerance, i.e., your capacity for undertaking financial risk. Your risk tolerance could depend upon a multitude of factors like responsibilities, objectives, your personality, your age and lifestage.
- Evaluation also includes understanding your financial needs and expectations in detail including in- and out-cash flows, investment objectives, investment horizon and liquidity requirements. An understanding of these factors is critical to devising appropriate financial strategies.
- And, as your profile changes with time and lifestage it is important to carry out the evaluation process at suitable intervals.
Products offerings
- The products that a wealth management service provider provides could include equities, bonds, commodities, mutual funds, insurance, derivatives, private equity, real estate funds, structured funds, alternate funds, portfolio management services (PMS), art investments etc. A good wealth management firm will try and offer products both from the jurisdiction in which it is based and from other international markets.
- But a wealth management firm doesn’t stop with just providing you with a wide range of standard, structured and even exotic products; an investment plan is drawn in accordance with an asset allocation strategy that is created based on your risk profile and your particular situation.
- Product services also include a superior transactional platform whether you are a “do-it-yourself” investor or are availing of managed investment services.
- Also, today, a wealth management firm’s offerings can be accessed digitally both via “traditional” Internet / website services and via mobile apps.
Research and Advisory services
- Devising a product mix relevant to your needs, especially given the multitude of products in each asset class, requires a deep understanding of the various products available including the skill to compare competing products, and deep research. And, once your portfolio has been created it is important to keep balancing it with respect to the allocated asset mix in keeping with changing market dynamics.
- The research teams’ of wealth management firms generate the required high-quality research which is then delivered to you through advisories as actionable reports / recommendations.
- And, given that your wealth and lifestyle needs could encompass a variety of other areas the advisory services bouquet could also include real estate, tax, succession planning, next-gen education, business services, legal services, family office services etc.
Lending services
- Your wealth manager can connect you to the lines of financing best able to support your goals given your financial circumstances. Customized lending products range from securities-backed finance, high-end residential mortgage, specialized asset finance, margin trading facilities, home equity lines, individualized credit lines and loans, credit and overdraft facilities for foreign exchange, standby letters of credit to highly structured complex credit facilities.
- Such tailored lending facilities are available to individuals, personal investment companies, family trusts and estates. It is also possible that these lending products also come to you at rates discounted to the standard market rate.
Legacy services
- Estate planning refers to the process of arranging and planning your succession and financial affairs and includes the management of your estate during and beyond your lifetime. A comprehensive wealth management services provider can provide a range of services to help ensure smooth succession planning. These could include –
Advisory – Advise on the structuring of an estate plan in line with your expectations.
Drafting and Execution – Includes drafting of wills, trust deeds and other ancillary/related documents.
Trusteeship – Acting as a Trustee for administration and distribution of the estate.
Executorship – Acting as an Executor for administration of the estate on the death of the settlor.
Safe Custody – Providing safe custody for all movable assets like jewellery, paintings, title documents of various properties etc.
- Estate planning can get complex especially when assets are sited in international locations as this would mean dealing with different national regulations. An experienced wealth management firm’s services can help you unravel this maze while ensuring smooth succession of your assets/properties. In addition to the above broad categories, some wealth management firms may also provide other services including:
- Family Office or Family Enterprise services that provide a very hands-on, “office”-like approach to managing your family’s wealth and investments. These services seek to help family business owners manage governance and sustain family enterprises across generations given changing socio-political-economic conditions.
Corporate services
- Wealth management firms, either singly or in a tie-up with other banks / lenders can also extend their relationship to include your corporate avatars with a platter of services and products that include providing research, advisory and implementation support for mergers and acquisitions, divestitures, joint ventures, financial restructurings, equity and debt capital raisings, identifying and utilizing emerging market opportunities, leveraged buyouts, infrastructure financing, project finance, management buyouts and buy-ins etc. across borders.
The above gives you a fair idea of what you can expect from a wealth management firm. But, it is important to remember that not all wealth management firms offer all the services listed above. You will need to talk to prospective wealth management service providers before deciding on one that fits your current needs and also has the scale to help you with your growing future wealth needs.
