The wealth management businesses are handled mostly by bankers and individual financial advisors. Often, you have to evaluate several wealth managers before opting for one or two. Wealth management is done by those professionals who have experience in the finance background namely Chartered Financial Analyst, Certified Financial Planners, Chartered Financial Consultants, Chartered Accountants, and money managers.
Wealth management as a career?
These people sell wealth management products such as mutual funds, stocks, and other such investment instruments to the clients depending on their needs. Despite the role they play, wealth management as a career in India is not given its due respect. When it comes to building a rewarding career in finance, people often refer to investment banking.
Now, times are changing. There is an evolution in the thought process, growing awareness about wealth creation, and other macroeconomic factors that are contributing to the growth in the career of wealth management India.
Why is there a need for wealth managers in India?
• Increase wealth creation: India can see a tremendous increase in wealth creation. The number of young entrepreneurs, billionaires, selling their firms, increasing investment in upcoming asset classes, etc. are contributing to the growth of wealth in the hands of few. Although there is inequality in wealth distribution, 2018 saw phenomenal progress in wealth.
• Awareness of wealth management: Although the wealth is increasing, people have zero knowledge on how to manage the accumulated wealth. However, factors such as digitisation, uncertain economic conditions, and inflation has led to awareness about wealth management India. A report in cognizant suggests, wealthiest people in India are the youngsters. These are the people whose level of financial knowledge is low and growing steadily.
• Lucrative pay package: Considering the wealthiest people in India hold a huge corpus; wealth management enables managers to earn up to INR 1 to 2 crore. Most of these earnings are via commission which is around 28 to 30 per cent. They also enjoy plenty of perks such as luxury cars, signature watches, and exquisite jewellery. Owing to this glamour quotient, many finance professionals leave their banking job and join wealth management companies.
• Lack of quality talent: Though there is demand in wealth management products, the industry is still in its initial phase. Several wealthy people want expert advice, but there is a shortage of talented wealth managers in India. The industry is facing a massive gap in hiring and retaining qualified, experienced, and ethical wealth managers. Thus, wealth management companies are scouting for resources from outside or from corporate banks, treasury businesses, or asset management companies.
• Increase in wealth management companies: Although there is a lack of quality managers, the number of firms are increasing by the day. Many banks are also entering the fray as well. This proves that the current demand for wealth management is vast. This is why there is a high demand for certified and qualified wealth managers.
About the author: Nirav Desai is a financial advisor and has a 10-year plus experience of working in a reputed mutual fund company. In this article, he has researched on wealth management India and written why wealth manager’s role is on a high.