Wealth management to become fee-based

By Sandeep Jethwani, Managing Partner, Head - Advisory, IIFL Investment Managers

In the rapidly evolving wealth management industry, it has become imperative to leverage upon technology to provide better wealth solutions, while at the same time staying tethered to the traditional values of trust and commitment.

This generation of Ultra High Net Worth Individuals (UHNIs) places a lot of emphasis on the investment process. They expect wealth managers to build a robust and sustainable investment method to manage their money. This starts with the investment policy statement and includes asset allocation, portfolio diversification and review mechanisms.

Move towards fee-based model: Wealth management will slowly eschew a commissions-based model in favour of a more transparent fee-based model. Above all, today's generation values transparency in their dealings. For this it is imperative to align clients' interests with the wealth managers' interests and build a conflict-free relationship.

These clients are definitive in their thinking and prefer to focus their energies on wealth creation. They are fully cognisant of the value add of wealth managers and are more inclined to leave the day-to-day management of their financial wealth to professionals.

Technology as an imperative: The new generation of wealthy are digital natives. They spend a considerable portion of their day in the digital realm and are quick adopters of technology. Consequently, they also expect their wealth managers to optimally use technology to improve user interface, reporting and engagement.

The new generation is more receptive to new ideas and is very comfortable asking for advice. The onus is upon wealth managers to constantly engage through education and knowledge building initiatives.

The equation with the current generation has evolved from the conventional client/service provider role to one of a partnership with mutual respect. The current generation is happy to engage in an ongoing conversation and open to both receiving and sharing constructive feedback.

 

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