With an increase in income and affluence in India, wealth management services are gaining popularity. Though, earlier thought to benefit the crème de la crème of the society only, wealth management is slowly establishing itself as form of service that can be utilized by all who have a sound financial background and are interested in safeguarding and growing their wealth.
With the country moving towards higher income levels and increased ability to save, with investors shifting from conservative options providing guaranteed returns towards riskier but high yielding returns, wealth management services are attracting more and more attention.
Wealth management is a combination of specialized financial services such as financial planning, investment portfolio management, accounting or tax services and estate planning for a fee. Advisory services, such as legal or investment advice on ones financial matters, forms an integral part of wealth management. They are offered to customers in packages and provide a host of benefits which ultimately assure two things - growth and security for one's existing finances.
Some may consider wealth management and financial planning to be the same but there is a big difference between them. Financial planning is a small part of wealth management with emphasis on an individual's post-retirement phase.
Financial institutions and banks are increasingly looking for ways to attract customers towards their wealth management services. This is said to be a fast growing banking segment in a market that is doubling every two years. Today, customers seeking these services can choose a wealth manager from a large number of institutions providing these services. Financial institutions like Reliance Money, Aditya Birla Group provide these services. Private banking wings of popular lenders such as Barclays, Deustche Bank,, ICICI Bank, HSBC and Kotak Mahindra are already well established in this segment. Customers can also opt for public sector banks such as Indian Bank, Canara Bank and State Bank of India for availing wealth management services.
In the beginning, the wealth management segment in India started out with banks providing insurance and mutual funds products to individuals. At the time, the advisory services were non existent as institutions were not charging customers for advice. But, later a number of regulatory changes were commissioned and the industry found new sources of revenue.