Experts say making available extensive product basket, trust building and subject expertise work out well to increase wallet share of HNIs with you.
Only three out of ten HNIs invest more than 75% of their investible assets with financial advisers, shows an online survey of more than 400 investors, all with over $500,000 in investable assets. The study was done by Oechsli Institute, a training firm which caters to financial advisors in US.
Although the study was conducted in US, the findings are of great relevance to Indian advisors. The study gives interesting insights into the way advisors should approach affluent clients, their psychology and expectations.
The research reflects window of opportunity for financial advisors to consolidate HNI’s investable assets under their management.
|
HNIs in % |
% of total investible assets |
|
11 |
less than 25% |
|
21 |
invested between 25% to 49% |
|
38 |
invested between 50% to 75% |
|
30 |
more than 75% |
Source- Oechsli Institute
Cafemutual spoke to some leading financial advisers to find out why they don’t invest their total investible assets with financial advisers and how advisers can gain the maximum wallet share of HNIs.
HNIs initiate any business relationship after keeping in mind the trust factor, expertise and competency of financial advisers, believes Suresh Sadagopan of Ladder 7 Financial Advisories. He advises financial advisers to build trust among HNIs investors by deepening discussions with them to increase their engagement. “Ironically, some advisers display their expertise in all segments even if they don’t have it. HNIs clients are intelligent enough to find out one’s capabilities. It better off to involve other financial advisers with you who have subject expertise in a particular thing. This will add value to your services for HNIs.”
Vishal Dhawan of Plan Ahead Wealth Advisors points out that many HNIs prefer to work with multiple financial advisers. As a result, the investible assets get divided among the financial advisers. He suggests financial advisers to represent themselves as master adviser through extensive services and subject expertise. Also, testimonials from other HNI clients have worked out well for him, he stated. “A wealthy client looks at the track record of IFAs before starting any business relationship with him. Hence testimonials from existing clients will help advisers to represent themselves better before HNIs.”
According to a Kolkata based Malhar Majumder of Fine Advice, many financial advisers don’t have extensive product bouquet since they deal only with few financial products such as mutual funds, insurance, structured products and so on. He says, “HNIs priorities are very different and to meet such priorities a financial adviser should go beyond their product basket and think of adding other services like private equity, global investments, arts, estate planning etc. Also, an effective strategy, knowledge and capability may help you to some extent. You should have equivalent knowledge and intellect as your clients so as to match with them.”
“The question is where this huge amount of HNI’s money has gone if they not invested with us. For last five years, equity market has been volatile. Meanwhile, physical assets like gold and real estate gave decent returns to investors. Hence, many HNIs move to physical assets from financial assets,” says Hemant Rustagi of Wiseinvest Advisors. According to him, the financial advisers should build expertise in particular subject to cater to HNIs. “HNIs evaluate and judge you in couple of meetings as they are quiet intelligent and observant in nature. You should try to present your subject specialization and knowledge to them.”
