If you think that it is the fund manager who is responsible to deliver performance, you may have to rethink as your wealthy clients think differently. The recent IIFL Wealth and Wealth X report titled IIFL Wealth Index 2018 shows that six out of ten wealthy individuals look for outstanding investment performance when they choose financial advisor to manage their wealth.
However, for most super wealthy, your or your firm’s track record and its standing among peers are the foremost criteria when it comes to appointing a wealth manager.
While rich Indians have a great understanding of global issues, they do not necessarily choose an international company to look after their money.
Fees also attract close scrutiny among the HNIs, with this becoming increasingly important. The richer the client, the more mindful they are of how much of their money is being eaten up by fees, finds the report.
In terms of longevity, wealthy Indians generally wish to maintain a long term relationship with their advisors. Wealthy Indians usually engage with an advisors for at least six years. HNIs who are over 55 years of age are likely to work with advisors for over five years and if it works, they don’t change their advisors.
Another key finding of the report is that most HNIs (82%) are likely to engage with multiple advisors to manage their wealth. Most wealthy individuals engage with two or more wealth managers.
Also, most wealthy Indians do not want to work with advisors who are not transparent when it comes to portfolio structure. Most clients stick with the advisor for long period if they are more transparent, the report said. However, disclosure of fee is not important for many HNIs. But for ultra HNIs, disclosure of advisory fees is important.
On services, Indian HNIs and ultra HNIs expect advisors to offer investment management advice, tax planning and estate planning.
The survey conducted in early 2017 involved 500 wealthy participants from across India. A mixture of face-to-face and online interviews were used. The participants were categorised into three key groups, based on net worth: HNIs individuals with a net worth between Rs.65 million and Rs. 650million, Very HNIs with a net worth between Rs.650 million and Rs. 2billion and ultra HNIs with a net worth of Rs.2 billion and above.