EXPLORING WEALTH MANAGEMENT IN INDIA

EXPLORING WEALTH MANAGEMENT IN INDIA Insights from Top Industry

The Diversification of HNW and UHNW Portfolios in India - Views from a Leading Local Asset Management Expert

Akhil Chaturvedi is a Director & Chief Business Officer at Motilal Oswal Asset Management Company, based in Mumbai. With over 24 years in the financial services industry in India, he has been in this role for nearly two and a half years, after more than eight years as the firm’s head of sales & business development. He has extensive experience in curating and delivering a wide range of investment products and services, such as Mutual Funds, Portfolio Management Services and also Alternate Investment Funds. Hubbis met with him recently to learn more about the asset management company he helps guide, which is part of the Motilal Oswal Group, a multi-faceted listed financial services company that in mid-January was trading close to its 52-week high and boasting a market valuation of over USD2.8 billion. The group was formed some 36 years ago and today has more than 10,500 employees across 550 cities in India. Akhil offered a snapshot of some key trends helping to propel the market, as well as highlighting some key challenges. Overall, he is energised by the growth trajectory of Motilal Oswal AMC, which he describes as an entrepreneurial and empowering wealth firm and one that has enjoyed stellar AUM growth, rocketing from around USD150 million when he joined in 2013 to the equivalent of over USD8 billion today. The firm will continue to roll out timely and relevant strategies, primarily focused on equities. And an exciting area for future growth is in helping attract more foreign institutional money to India, to which extent the rollout of GITF City, India’s onshore IFC, should, Akhil reported, help significantly in that endeavour.

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Akhil launches straight into the evolving appetite around investments for family offices, reporting that there is a significant shift taking place in the curation of portfolios. He explains that a few years back, portfolios were really rather generic, full of relatively simple, standard products, traditional asset mutual funds, and Alternative Investment Funds (AIFs), and often delivered through dedicated and tailored Portfolio Management Services (PMS) by leading wealth managers.

Demand for innovation and diversification

“But we have seen in the HNW and UHNW segments, including family offices, that there has been increasing demand for more innovative products and different asset classes, such as commercial real estate, private credit and private fixed income, private equity, venture capital and so forth,” Akhil reports. “Accordingly, for most of the private wealth entities and multifamily offices, you will find that there is a shift of asset allocation from plain vanilla products into differentiated products.”

Additionally, he notes that there has also been an increasing tendency to allocate towards ‘passive’ structures such as ETFs and indexed funds, with an increasing emphasis on thematics.

Rising risk appetite amongst HNW and UHW investors

“As the typical size of the family offices here in India increases, the risk appetite needle also tends to move,” Akhil observes. “They still have core allocations to more standardised products, but they are more prepared to take on incremental risk in newer or differentiated asset classes, provided those are delivered by high-quality fund managers. This means we have seen more specialisation amongst the fund houses, as there is rising demand for an institutional offering of these types of products with appropriate regulatory rigour that offers comfort to these investors as they ratchet up their risk exposures.”

The gravitational pull of passives

The shift towards passive strategies and approaches has been multiyear in its progress, especially in last few years, when active funds found it very challenging to outperform. “These investors started their transition towards passives around 2021, and that has continued,” Akhil reports. “Now that alpha is back on the table, there is a swing back somewhat towards active funds and strategies, but the underlying move towards passives will continue, we believe.”

He says Motilal Oswal AMC and several other leading asset management firms are also creating

more innovative products, such as factor strategies, multi-factor strategies, quant models, and so forth. “We are delivering to the trend line of this diversification from plain vanilla products into more niche and sophisticated investments,” he reports.

The quest for profitability via differentiation

The advantage of this evolution for asset management companies and the wealth industry generally is that these newer and differentiated companies buck the trend of fee compression in the more simplistic products. “Diversification and innovation translate to greater scope for higher fees, which clients are more prepared to absorb in exchange for differentiation,” he states.

A good moment for India

Akhil says that the cards have been stacked in favour of these investors, as the momentum of the broader market in India has been so encouraging.

“There has been widespread performance in India, with many family offices also increasing exposures more broadly into the mid-cap 150 index, or the small-cap 250 indexes as well as part of their more ‘plain-vanilla’ holdings,” he reports. “And the diversification towards exposures with higher returns than the broader index in order to add alpha should be seen in the context of this more sophisticated approach to the overall portfolio. Conditions have been highly favourable all around.”

Bring on the international money

Akhil also highlights the continuing drive to bring more foreign money

AKHIL CHATURVEDI

Motilal Oswal Asset Management

into India as well. He points to the firm’s Mauritius platform that they opened in 2016 as the conduit for increasing foreign institutional activity and interest, but says more can be achieved. “Honestly, it has been slow progress for various reasons, but we do believe in the opportunity, and we will also leverage our presence in GIFT City, which will offer more direct capabilities and the ability to design more interesting products for those foreign investors we know are out there,” he states.

A GIFT that will begin giving

He adds that the rise of GIFT City will eclipse the role of Mauritius for the firm, as foreign investors have increasing regulatory and compliance concerns over that particular jurisdiction.

“GIFT City is still very new, and much work needs to be done to explain and promote it, but it will grow in prominence, and it offers more transparency and quality in terms of the regulatory aspects as well as the costs, which are more reasonable than offshore operations,” he says. “Moreover, there are some tax advantages for both ourselves as the asset management company

and for the investors and those incentives will be there for at least the next 10 years.”

Jostling for position

In his role at Motilal Oswal AMC, Akhil clearly has his finger on the beating pulse of the wealth management industry in India. Looking more broadly at the higher echelons of the private investor wealth market, he then drills down into key emerging trends in India, explaining that the wealth market in general is experiencing a lot of jostling for position and some consolidation, as competitors fight to protect and hopefully enhance their market positions.

“And everyone is on the hunt for talent, which is increasingly challenging,” he reports. “Without the right people and more of them, the wealth model struggles to keep up with the potential on offer. This business is a people business, and the growth path ahead is remarkable, so we need not only to hire, but also to nurture and develop new talent.”

He adds that this particular challenge is one reason for some consolidation taking place amongst

the top wealth management firms in India, as everyone attempts to grasp the huge growth momentum in the market.

Akhil’s path to success and contentment

Akhil was born in Mathura, which he reports is the birth city of his Lord Krishna. He spent his formative years in Mumbai, including at the University of Mumbai before attending Leeds University in the UK to complete his Master’s in Accounting & Finance, and then his Master’s in Business Administration & Marketing. In addition, he is also a ‘Certified Financial Planner’

He returned home to India in 1999 and since then has been consistently involved in equities and funds. He is currently studying part-time ‘Emerging CXO’ program at Cornell University that has been specially designed for the top 25 Motilal Oswal Group management. He will graduate in May this year.

Akhil and his wife married some 23 years ago and have two children, a son aged 20 and a daughter aged 16. He loves all family activities, and his spare time might be spent enjoying

« “As the typical size of the family offices here in India increases, the risk appetite needle also tends to move. They still have core allocations to more standardised products, but they are more prepared to take on incremental risk in newer or differentiated asset classes, provided those are delivered by high-quality fund managers.” »

running or functional training, as well as chilling out at home with YouTube, Netflix and other pastimes to help recharge mentally. The family loves travel, but prefer shorter trips rather than long vacations, with their next trip slated to take them into the wilds of Ranthambore in Northern India to watch tigers in their natural habitat.

Stability, transparency and growth

Akhil draws the discussion towards a close by noting how much he has enjoyed his career to date and has been so impressed by watching India emerge from a relatively modest and fragile economy of USD500 billion at the turn of this century, to the economic juggernaut it is today.

“I have been fortunate to see India transition remarkably in the past two decades to a dramatically larger economy, to a position of far greater stability and to now being far more able to realise the country’s truly massive potential,” he says.

Emerging and maturing

He says that India, in the past 20-plus years, has emerged from the shadows of regulatory inconsistencies and financial

Key Priorities

Regarding priorities for the year ahead, Akhil says they remain highly focused on the equity space, with forthcoming new product launches set to flow on top of recent successes. “These are our core active products that are enjoying very strong demand amidst the very positive market environment,” he says.

Another key area is passives, where they have already built a strong market share, delivering a series of passive equity strategies and thematics, with robust demand flowing from family offices, large institutional investors and distributors. “We have our eyes set firmly on a leadership position on the passive investments,” he states.

Also within the passive umbrella, the firm is expanding its quant strategies. “We have been building our quant capabilities, supported by unique and complex quant models, factors and derivatives,” he explains. “This quant-driven rule-based investing is firmly within the equity umbrella.”

The third key mission is to boost digitisation, both to enhance the experience for existing clients and to appeal to younger and newer clients, making it easier for them to onboard and access the firms funds and strategies.

market shenanigans in the past to a market with better regulations, greater transparency, and better overall governance,” he reports. “Helping all this has been our political stability in the past decade, all of which has helped democratise the world of

investments, and stimulate rapidly rising participation of Indian private clients in our markets.”

This has all helped propel the wealth management industry. In the mutual fund space, for example, the market has in the

« “Without the right people and more of them, the wealth model struggles to keep up with the potential on offer. This business is a people business, and the growth path ahead is remarkable, so we need not only to hire, but also to nurture and develop new talent.” »

past ten years expanded more than five-fold to the equivalent of roughly USD60 billion today, and, Akhil says, with more dramatic growth ahead.

Scratching the surface

“Despite this headlong growth, I still describe wealth management in general as a sunrise industry,” he comments. “The potential is dramatically greater than we are realising yet, and realistically, we are still scratching the surface.”

He reports that leading analysts are anticipating 12% to 13%

nominal GDP growth for India for many years to come, and hopefully many decades. “We are becoming a developed nation, and as we do so, there will be truly immense,” he observes. “We might look like an elephant which moves slowly, but actually, elephants can move very fast, and when they do, it is remarkably exciting and very impressive.”

Leading by example

His final word is to extol the virtues of the corporate culture of the firm. “We have an entrepreneurial culture of innovation, trial and

error, all of which helps us achieve growth,” he reports. “Decisionmaking is encouraged, and people are able to test their abilities and to assume a true sense of ownership and accountability, which is very empowering. I believe our group demonstrates some key qualities such as integrity, ethics, and a genuine passion for quality. And that has helped the firm grow in the past decade from just USD150 million of AUM when I joined in 2013 to boast AUM of over USD8 billion today, putting us part of top 15 club in the Indian AMC market.”

Gaurav Sharma from Equirus Wealth on India’s Wealth Management Prospects and GIFT City’s Growth

Equirus Wealth Private Limited (“Equirus Wealth”, “Equirus”), a prominent holistic wealth products platform established in 2018, is known for its dedicated services to India’s High Net-Worth (HNW) and Ultra High Net-Worth (UHNW) clients. This platform was founded by a group of experienced professionals, each specializing in creating tailored solutions for this specific demographic. Recently, Hubbis had the chance to engage with Gaurav Sharma, the Principal Officer at Equirus Wealth Private Limited (IFSC Branch). During our conversation, Gaurav provided insights into the future opportunities he envisions for Equirus Wealth, its clients, and the broader wealth management industry in India in the coming years. He elucidated on the potential offered by both onshore and international collaborative developments, as well as the evolving prospects in the newly emerging jurisdiction of GIFT City.

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Opening the discussion,

Gaurav described his role as the principal officer for the GIFT City fund. He outlined his responsibilities and approach to client service in wealth products. Gaurav explained that his job involves providing guidance to both direct clients (B2C) and business-to-business clients (B2B), emphasising the importance of understanding each client’s specific needs, especially in terms of risk assessment. His role is to ensure fund management, and risk management, including overall activities of the Fund as per regulatory requirements.

The Importance of Tailored Client Strategies

Addressing a question about differentiating in a competitive market, Gaurav highlighted the importance of a tailored

approach to each client at Equirus. He discussed the necessity of understanding a client’s risk tolerance, exemplifying this with a scenario involving investment in small caps or large caps, as and when client invest, which have higher volatility compared to larger indices like the NIFTY. This individualised approach is key for standing out in a crowded field.

Furthermore, Gaurav provided a perspective on the scale of the industry. “The size of the mutual fund industry in India, in terms of assets under management, amounts to USD 600 billion. “This figure,” he observed, “underscores the vastness and potential of the wealth management sector in India, particularly as it is experiencing exponential growth.”

Navigating Custody and International Investment Challenges

Turning his attention to GIFT City Alternative Investment Funds (“GIFT AIF”) Gaurav clarified the custody arrangement for fund within the context of GIFT City and prospects for international investors, namely ultra-high-networth clients, in this context. He addressed concerns and misconceptions about the operational and regulatory aspects of investing in India through GIFT City located Funds registered under International Financial Services Centres Authority (IFSCA).

He homed in on the logistical arrangements. “Axis Bank acts

as the Banker and Custodian for GIFT City AIF,” he explains. “This choice was driven by the need for a reliable custodian to handle investments in dollars, especially targeting Non-Resident Indians (NRIs) and foreign investors. The fund is designed specifically for offshore investment through GIFT City, excluding Indian domestic money.”

He further detailed the administrative and accounting aspects of the funds. The fund accounting will be managed by KFin Tech, a listed entity known for its capability in handling fund accounting and other necessary services.

He went on to describe the investment and transfer process for foreign investors. He noted that they do not engage in hedging emphasising the need to outperform and deliver returns above the depreciation value of the rupee, ensuring profitability for the investors upon withdrawal of their funds.

Future Projections

The discussion shifted to a longerterm perspective, focusing on the development of India’s financial sector over the next five years. Gaurav Sharma recognised the substantial interest from foreign investors in India, attributing it to the country’s robust economic growth. He contrasted India’s growth rate, approximately 7-8%

« “There has been an average annual growth rate of 14.5% over a decade, signalling the potential for even greater returns in specific sectors, such as small caps, which are capable of delivering 20-25% compound annual growth rates.” »

GAURAV SHARMA Equirus Wealth

according to the International Monetary Fund (IMF), with that of other major economies like China GDP, which is projected to grow at about 5% in 2023 & expected to grow at 4.6% in 2024 . Gaurav highlighted how India, despite its high interest rates, continues to show strong performance, drawing a comparison with the United States, where higher interest rates are anticipated to decline as the economy slows.

He then turned his attention to the internal dynamics of India’s economy, emphasising its selfsustaining nature, largely driven by domestic consumption. Gaurav pointed out the Indian government’s initiatives to boost exports, particularly through Production Linked Incentive (PLI) schemes and the burgeoning digital economy. He specifically noted the success in the mobile application sector, where India has started to see significant export sales.

Delving into investment strategies, Gaurav mentioned that historically, the Indian market has experienced more positive than negative returns. “There has been an average annual growth rate of 14.5% over a decade,” he reports, “signalling the potential for even greater returns in specific sectors, such as small caps, which are capable of delivering 20-25% compound annual growth rates.”

Key Priorities

From his perspective as a Principal Officer, Gaurav mentioned that a good start for Equirus in GIFT City would be to reach USD5 million in fund, recognising this as a realistic goal in the near future, given the current learning curve they are on.

He then delved into the motivations behind setting up the business, emphasising the significant investment of time in the learning process at the early stages. Gaurav pointed out the numerous areas where they are still gathering knowledge, including tax issues, processes, and understanding the governance of the Reserve Bank of India (RBI) and foreign Federal policies. He accepted that this phase involves facing new challenges, making mistakes, and learning from them to become wiser over time.

Looking ahead, Gaurav highlighted the importance of distribution in growing the business. He noted that it’s challenging to onboard direct foreign clients, as they may not be familiar with many funds in the industry. He stressed the need for effective distribution channels and building strong relationships to attract investment. Gaurav underscored that the initial two years are crucial for establishing these distribution networks.

Bringing the discussion to a close, Gaurav expressed confidence that with the right approach and experience, they could potentially raise USD10-USD20 million with more to follow. Gaurav pointed out the significance of understanding the potential of various regions like Europe and the Middle East and attracting distributors and in investors who wish to access India’s markets. There is a need for a unique investment proposition and the nascent development of GIFT City has significant potential for Indian capital markets, and asset managers. Equirus has no doubt that it intends to be at the forefront of this opportunity.

Examining GIFT City from a broader perspective, Gaurav acknowledged its nascent status, and the challenges fund houses

face in attracting substantial investment. He identified a lack of expertise in foreign distribution as a significant challenge, suggesting

« “We are predicting significant investment inflows from foreign investors, including endowment funds, in the next five to six years.” »

that the industry is currently undergoing a learning process to overcome these hurdles. He shared insights from conversations with fund houses operating in GIFT City, illustrating an industry-wide effort to adapt and grow in this innovative environment.

Building a Successful AIF in GIFT City

Gaurav elaborated on the significance of Alternative Investment Fund (AIF) within GIFT

City’s context. He posited that cultivating a successful AIF for foreign investors in GIFT City is likely to be a long-term process.

Gaurav expressed optimism about the future of GIFT City. “We are predicting significant investment inflows from foreign investors, including endowment funds, in the next five to six years.” He underscored the beneficial tax incentives for businesses setting up in GIFT City, aiding their growth and profitability.

Our Engagement with India in 2024

However, he also acknowledged the challenges in targeting foreign customers, particularly in the initial stages. These challenges include the necessity for extensive travel and the effort required to establish a strong international brand. Gaurav emphasised that establishing a foreign fund in GIFT City is an expensive and complex proposition, necessitating careful planning and strategic execution.

The Hubbis Team eagerly anticipates delving further into the themes explored this January with industry leaders at our upcoming India Wealth Management Forum 2024

The Forum aims to expand upon the crucial insights gained from industry leaders regarding key opportunities and challenges in the market. We will explore a range of topics, including the evolution of wealth management, addressing the needs of India’s HNW and UHNWI families, enhancing client services, optimising investment offerings, talent acquisition strategies, the significance of GIFT City, and more.

For more information, please visit the forum’s homepage. If you have any questions regarding this article, or the forum - from discussion topics to participation details - feel free to reach out to us

Equirus Wealth Head on Riding the Rising Wave of India’s High-Growth Wealth Market

Abhijit Bhave has been a stalwart of the Indian wealth management market for approaching three decades, and it seemed like a natural fit for him to take the reins as Managing Director and CEO at Equirus Wealth in mid-2023. When Hubbis met with him in Mumbai recently, we found a wealth management leader with a clear vision of the evolution of the industry in India, and also of how he can help direct the Equirus business to grasp the immense potential he sees for what he believes will be a remarkable decade of growth in India. We also found someone with a genuine passion for the business, who thoroughly enjoys leveraging his long experience and the pedigree he has gained over many years. He held prominent positions at home and overseas with leading organisations such as Deutsche Bank, HSBC, ICICI Bank, UTI Asset Management, Karvy Private Wealth and before Equirus as CEO of Fisdom Private Wealth, and his role at Equirus is evidently bringing together all those multi-faceted experiences to help drive Equirus Wealth into the future. Abhijit is realistic about the intensifying competition, especially as India enjoys such a remarkable growth trajectory. But he firmly believes that as long as Equirus keeps its eyes firmly on the valuable role that wealth management is playing in the democratisation and financialisation of private wealth, and also follows a clearly defined strategy, there are many rewards ahead for the firm and for clients alike.

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“The future is bright as we look forward today,” Abhijit claims, opening the conversation. “I particularly like what our Prime Minister said a few years ago, quoting a line from a Tamil poem that effectively translates to ‘This is the time; this is the right time (for India)’. I personally believe that the next 10 years are going to be the best years of my life and the best years for wealth management in India. I am remarkably inspired and excited by the prospects.”

It was in July 2023 when Abhijit arrived at Equirus Wealth, which is part of the long-established investment bank and institutional equities specialist Equirus Group. He is responsible for the firm’s wealth management, asset management, HNW broking and digital wealth management businesses.

A group-wide effort

He collaborates closely with the long-established businesses of the group, such as with the highly successful in-house Investment Banking team, through which he is helping source new HNW and UHNW clients from amongst India’s deep entrepreneurial ranks.

And he works closely with many different providers to deliver domestic and global investment products and solutions to clients in India and also the Middle East. He also focuses on leveraging the in-house research capabilities to provide customised asset management and stock broking solutions to HNW & UHNW clients.

A clear vantage point on a growth market

With these responsibilities, Abhijit can draw on his experience of the evolution of wealth management in India, right back to when he bought & sold his first mutual fund in 1996 as he began his multi-decade career in the industry.

He says his optimism about India is well-founded amongst leading experts who are very bullish about India’s economy. Indeed, the World Economic Forum website highlights India’s growth rate of 7.2% in fiscal 2022-2023, the second-highest expansion among the G20 countries and almost twice the average for emerging market economies that year. And the outlook is similarly exciting. And on January 15, the WEF reported that India’s economy should become the world’s thirdlargest by the end of this decade.

The Indian juggernaut

“Numbers and projections aside, the plain truth is the momentum is with India, and massive wealth creation is happening,” Abhijit comments. “As this happens, more and more people are shifting from physical assets and plain vanilla bank deposits to financial assets, a trend that has been prevalent for several decades already but that is now accelerating. Incremental savings are flowing into financial markets and with 65% of the

working population below the age of 35, the flows will only accelerate further. Do not underestimate the power of the common man, or in this case the emerging private investor in India

He reports that projected company earnings growth of at least 12% annually for the Nifty 50 companies in each of the next three years will add further ballast to the market, helping to further buoy domestic demand for Indian listed investments.

Systematic Investment Plans,

or SIPs, are vehicles for Indian investors to invest regularly in mutual funds, and their numbers have been growing apace. Moreover, as domestic indices rise and local liquidity increases, so too foreign money has been flowing into India.

A compelling story

“More local money, more foreign funds through FII flows, and positive earnings momentum all add up to the stock indices performing very well in the coming years,” he reports. “We will obviously benefit from these flows and rising AUM numbers.” And he adds that the Indian mutual fund industry as a whole recently surpassed the equivalent of more than USD 600 billion.

Stability and optimism

Abhijit also remarks that the political stability that India has enjoyed for some years already should endure at least another five years. Without going into detail, he says that this will help confidence in the financial sector and, therefore, further encourage private wealth clients to take equity and other exposures.

ABHIJIT BHAVE Equirus Wealth

“There appears to be less fundamental risk now than historically,” he comments, “but as we all know, things can change. There could be geopolitical crises; the world economy could slump, and there could be a Black Swan event like Covid; so there are clearly some caveats. But right now, the outlook is rosy, and the Indian juggernaut rumbles onwards, especially if we view things through the ‘EEE’ prism, with E for economy and E for earnings both very encouraging and E for events here looking fine for now, albeit with the caveats I mentioned.”

Focus and differentiation

Abhijit then turns his attention directly to Equirus Wealth, noting that the firm is around six years old and today has more than 100 employees across 23 locations , with clients across more than 400 cities, and approaching USD 1 billion in AUM. The business is part of the Equirus Group, which itself was formed some 16 years ago and is today a very successful investment banking firm, this year leading seven new IPOs in India, for example, and with a track record of proven expertise at identifying growth and potential. He notes that Equirus Securities Private Limited provides top-notch fundamental stock research covering 250 Indian listed companies, and handling high levelsof investment flows from institutional investors, asset management companies, « “Numbers

insurance companies, hedge funds, and FIIs.

Filling in more of the history, Abhijit explains that on the back of the group’s success over many years, Federal Bank, a leading private sector Indian bank, took a significant minority stake some six years ago, shortly before the group launched Equirus Wealth Management.

Launches and momentum

It was not long before Equirus Wealth launched some major portfolio management services, or PMS, strategies. The first, created more than five years ago, is a smallcap strategy that has grown rapidly and performed remarkably well. They then launched a successful multi-cap strategy, around a year back. Then in December 2023, they launched a GIFT City fund and a Category One venture capital AIF, or alternate investment fund, investing in technology start-ups

He points to several other developments that have been further elevating their proposition, such as the launch of a HNI (Indian parlance for HNWI) broking desk, beefing up their asset allocation offerings to include pre-IPO anchor investing, and improving their digital accessibility and client solutions.

Broad market coverage

“We are now well on the way to becoming a USD 1 billion AUM

business, very soon,” he reports. “Our approach is to cover the entire wealth stack, from retail to mass affluent to HNI to ultra HNI and family office clients.”

He explains that the interface with the retail market will be 100% digital, mass affluent and HNI customers will come in locally through various channels including client referrals, open market sourcing, digital leads as well as referrals from partner banks, including Federal Bank. This also will address the needs of the NRI community primarily from the Middle East.

As the wealth of each client segment rises, so too does the delivery of a wealth manager, so that there is more of a hybrid human-led and also digital approach to HNI clients (nicely termed as “phy-gital” model), while the UHNI and family office clients are then serviced almost entirely with personal touch, supported by appropriate digital technologies to help both the advisors and the clients.

Leveraging the Investment Banking franchise

Abhijit says their UHNW/family office offering is new to the firm, a launch Abhijit has championed since he joined the firm. “There are other models in India, such as Avendus, which have been very successful in leveraging their investment banking relationships

and projections aside, the plain truth is the momentum is with India, and massive wealth creation is happening.” »

to forge into the family office market, and we are pursuing our own version of that now,” he explains. “The mission is to deliver curated portfolio management and sophisticated allocation advice.”

Abhijit also notes that the firm might expand in the Middle East, perhaps alongside Federal Bank, with their eyes set broadly on Dubai, Abu Dhabi, Oman, Kuwait, and Qatar. “We are in the process of analysing what licenses we might apply for and where,” he reports. “But it will not be immediate, as we have other pressing priorities here.”

GIFT City as the conduit for foreign portfolio money

As to the mission of drawing more foreign funds into India, Abhijit says their new GIFT City fund is a step in the right direction. He remarks that GIFT City is in its early days, but the new fund is their means of dipping their toes in, with a dollar-denominated fund targeted at Indian equities and riding on the back of their long-established and successful small-cap fund.

“The path through GIFT City is tax-free for foreign investors and indeed for NRIs, and there is little doubt that the wrapper-type

Key Priorities

Abhijit has been in the hot seat at Equirus Wealth for only just over six months, but he articulates a clear vision of his priorities for the next two years, the first of which is to boost their product manufacturing capability and to add more unique, innovative products.

The second priority is to leverage the firm’s existing strength in investment banking. “We have barely touched the tip of the iceberg in this regard,” he states. “The potential to unlock ideas, relationships and value through our IB expertise is huge. And going forward, every single entrepreneur whose value has been unlocked through investment banking will potentially become a loyal or regular customer of our wealth management operation.”

The third key mission is to grow the footprint within India and outside India in the HNI and mass affluent space. “We will do this both by leveraging our partner banks’ infrastructure and connections, and also by creating our own brand and outlets, which people can trust.”

funds that have hitherto been the vehicles for foreign funds coming to India will migrate to strategies that access the market via GIFT City,” he elucidates. “This will help both numerous NRIs wanting to participate in their home country’s growth, as well as foreign investors.”

The offshore avenue onshore

He elaborates on this, noting that the idea is that GIFT City will become the onshore-located offshore financial centre, like a local ‘Singapore’ for India, with seamless, tax-incentivised entry and exit. This may reduce the dependence on

« “The building blocks are coming into place, things are starting to happen, and the potential is clearly there. But, as I said, these are early days, and there is a long way to go for GIFT City, in reality, to convert the massive business potential into reasonable scale of investments.” »

some other international centres, which have served this function in the past, but which are less well regarded from a regulatory perspective. However, GIFT City funds are under the regulation of the Securities and Exchange Board of India.

“The building blocks are coming into place, things are starting to happen, and the potential is clearly there,” he says. “But, as I said, these are early days, and there is a long way to go for GIFT City, in reality, to convert the massive business potential into reasonable scale of investments.”

Perfect conditions

Abhijit then elaborates on the potential the firm sees amongst clients, from retail to mass affluent investors and upwards. He says the market is vast, with more than 18 million people able to invest at least USD 100,000, and with new HNI and UHNI clients being created continuously on the back of India’s remarkable expansion. “The wealth management market conditions and growth in India are so incredibly favourable, and the wind is truly in our sails,” he states.

He explains that they onboard a lot of HNI clients through partner banks, which have a strong presence and deep customer base across India. Besides leveraging that type of access, we also aim to differentiate ourselves in several ways, for example, we had seven successful IPOs in the past year, all from different sectors of the economy; these give us a great access point to HNIs and UHNI customers, including through our ability to place pre-IPO investments with the larger clients. The returns have been outstanding for many

Getting Personal with Abhijit

Abhijit Bhave drives the strategic vision and direction at Equirus as MD and CEO of the wealth management arm of the Equirus Group, focusing on a client-centric approach to create value and achieve consistent success. As a thought leader and oft-invited presenter and panellist, he has appeared in many forums and conferences, speaking about private banking and wealth management, digital transformation, product opportunities, and the impact of WealthTech solutions.

In a career approaching 28 years, Abhijit has established and helped scale both existing and new wealth management ventures in India and abroad, in organisations such as Deutsche Bank, HSBC, ICICI Bank, UTI AMC and Karvy Private Wealth.

Until he joined Equirus in mid-2023, he was heading the FinTech Fisdom Private Wealth as CEO, where he helped build the wealth business from the ground up. In the 20 months he was there, they built AUM to roughly the equivalent of USD 650 million.

Before joining Fisdom, Abhijit was mandated to revitalise the wealth management brand for the Karvy Group, where he launched customised investment solutions and introduced new digital capabilities for Indian clients and overseas markets. Before that, during his long association with Deutsche Bank AG, while he was managing multiple portfolios along with performance and growth initiatives, he was handpicked to co-lead the relaunch of the wealth business in Vietnam for a local bank, Habubank, on behalf of Deutsche Bank, who was a strategic investor & shareholder.

Abhijit holds a Post-graduate Diploma in Marketing and Finance from the Indian Institute of Management, Lucknow. He has also completed his degree in mechanical engineering from Mumbai University. He has authored articles on wealth management and has won several awards from leading industry publications and business associations.

When he is not working, Abhijit enjoys spending time with his family. He has been married to Shweta for 23 years, and they have a 15-year-old son and a three-year-old dog, who is very much a part of the family, he says. He enjoys other interests such as reading, music and writing. Quieter times at home might also see him meditating and re-energising.

of them, especially those who got in earliest, with performance of over 100% in six months, or even shorter in some cases.”

The second key conduit to service these clients effectively is through their research expertise covering 250 selected stocks. “This works very well with HNIs and right up to the family offices,” Abhijit reports. “Obviously we also deliver standard products as well, but we are always

looking out for being able to deliver something that other firms are not.”

Loving the journey

Abhijit closes the conversation by reminding us of his passion for what he does. He says wealth management is a people business that suits his personality ideally and which he believes contributes to people’s financial and personal well-being.

“I am doing what I love, we are doing what we are best at, advising and guiding our clients, and hopefully that shows through in our achievements and our business culture,” he comments. “We are lucky to be in what is clearly an emerging Golden Age for wealth management in India, and it is up to us to seize that potential. So far, so good, I can report.”

For further insights into Equirus Wealth and Abhijit Bhave, see also this Hubbis report:

Building Reach, Capability and Scale in Anticipation of a New Golden Era for Wealth Management in India -Asian Wealth Management and Asian Private Banking (hubbis.com)

We are looking forward to discussing similar themes at our upcoming Hubbis India Wealth Management Forum, which takes place on Wednesday 28th August, 2024

Very simply, the event will explore the unfolding trends within India’s flourishing private wealth sector, highlighting the modernisation of wealth and legacy planning, the trajectory of insurance solutions, and the role of digital innovation in augmenting advisory services. Expert dialogues will encapsulate the challenges and opportunities inherent in catering to a multi-generational clientele, the collaborative dynamics between wealth managers and insurance professionals, and the strategic approaches towards ensuring a successful intergenerational wealth transfer, all against the backdrop of India’s economic and technological advancement.

Find out more about the forum by clicking HERE

Anmol Budhraja: Raising the Bar in the UAE Wealth Management Space with Three Comma Capital Advisors

Dubai is growing, diversifying and, many argue, improving in numerous ways. Anmol Budhraja, the Founder & CEO of Three Comma Capital Advisors (3CCA), is doing exactly the same, riding the powerful wave of wealth management sweeping through the UAE and the wider Middle East. Since 2018, under his leadership, 3CCA has carved a niche in the market, focusing on sophisticated and innovative financial solutions and top-flight, technology-supported asset management for ultra-affluent clients. These products and approaches play to Anmol’s strengths – he spent over 10 years as Managing Director in the Financial Markets Group at Standard Chartered before becoming CEO of Three Comma Financial Consultancy in November 2016, and then in 2018, creating the dedicated independent wealth platform that is today 3CCA. Hubbis ‘met’ with Anmol recently by Zoom to hear more about the business, his vision, how he is positioning the firm and his views on the wealth market’s evolution.

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View Anmol Budhraja’s LinkedIn Profile Find out more about 3CCA

Anmol opens the conversation by offering some background on his own journey in the world of corporate and Institutional finance. He worked for major financial institutions serving the needs of some of the largest corporates in the re s time has passed, more serious and established players have joined the industry. With the development of DIFC and DFSA as regulators, the asset management business has not only matured but is becoming increasingly competitive, with a focus on qualitative differentiation, and not just pricing. In this evolving landscape, each asset manager must find their unique approach to succeed, their different edges and nichegion, interacting largely with the CEOs, CFOs, Treasurers and other specialists,

and delivering risk management solutions. He saw the opportunity to then translate the skills to the UHNW and family office wealth market to deliver a more institutional-level offering.

3CCA’s DNA

“Our aim is to usher in a much needed institutional-grade advice and risk management solution set to the UHNW “he says. “each client is treated as an institution and while doing so the firm intends to leverage digital technologies to assist our RMs to provide the best outcomes and the best experience to this client. From smart client onboarding to portfolio management, technology is being integrated at every stage to streamline processes, as well as improve the outcomes.” He adds that their focus is now on the UAE and Middle East, but they plan to later expand into the UK, Europe, and also Africa.

“The idea now is to leverage our extremely strong team composition and platform to leapfrog towards benchmark asset size ,” he says.

Building scalability

He explains the importance of adding the asset management vertical. “We are readying ourselves for the billion-dollar AUM mark, and then anticipate

rapid growth from that point onwards,” he enthuses.

Technology and People are the lynchpin in 3CCA’s strategy. Anmol says he is championing the development of bespoke technological solutions, catering specifically to the high-end wealth segment. They are improving and delivering everything from better regulatory processes and engagement to sophisticated portfolio aggregation systems, where he says they are leveraging technology to empower their RMs and advisors to devise better ideas supported by full analytics.

Design and architecture

The technology does not come from vendors. “We tried that approach, but it did not get us to where we wanted to be,” he explains. “We then decided to allocate significant capital and energy to creating our own solutions in-house and build everything from scratch, through a partner dedicated to our objectives. We have spent a lot of time working very closely with them, so they completely understand our client set, processes, objectives and mission. We even brought that firm’s founder to our board.”

He reports that they are well on the way to completion of their client onboarding and portfolio aggregation piece, after which they

« “The idea now is to leverage our extremely strong team composition and platform to leapfrog towards benchmark asset size.” »

ANMOL BUDHRAJA 3CCA

will focus on a high-technology order management system, where the client is fully integrated with their platform.

There is a need to digitise the process flow- From the time the RMs recommend/advise, through to the client wishing to proceed” he explains. “This is far removed from a retail-type execution platform, There are instances when our clients are dealing in complex products, where they must record their understanding of the risks involved, and then the execution should flow through seamlessly to the end custodian bank. There will be multiple counterparties and processes at play, but everything will progress in sync.”

He maintains that this will be a market-leading platform and will, when fully operational, significantly increase the productivity of the RMs. “The idea for each RM is to manage more clients, but still do so in a very bespoke manner. At the end of the day it will always remain a peoples business”

Key Priorities

Anmol articulates two main priorities. Firstly, they aim to ensure their technology is fully developed within the next year. Secondly, they are focused on enhancing their asset management capabilities. While their core business remains advisory and that’s the entry point into the value chain, they want to showcase their asset management expertise. He explains they have already established discretionary portfolio mandates, their own asset management operations, and a hedge fund, and plan to leverage those for future growth.

“We like to showcase our AM capabilities because, to an extent, it holds us accountable for our performance. It is a more stable business that helps us retain clients and build further share of wallet. They continue to build this asset and fund management capabilities, preferring to build their reputation as an asset manager along with being a dedicated investment advisor.”

Local bank opportunity

Anmol turns his attention to the market at large, remarking that many local banks in the region are expanding their private banking business, To some extent, there appear to be natural advantages – having a captive individual and

corporate client base – but at the same time this vertical remains a small contributor to the overall bottom line There is room for incremental value.

Evolving and maturing

“The market has matured and professionalised significantly,”

« “As time has passed, more serious and established players have joined the industry. With the development of DIFC and DFSA as regulators, the asset management business has not only matured but is becoming increasingly competitive, with a focus on qualitative differentiation, and not just pricing. In this evolving landscape, each asset manager must find their unique approach to succeed, their different edges and niches.” »

he reports. “As time has passed, more serious and established players have joined the industry. With the development of DIFC and DFSA as regulators, the asset management business has not only matured but is becoming increasingly competitive, with a focus on qualitative differentiation, and not just pricing. In this evolving landscape, each asset manager must find their unique approach to succeed, their different edges and niches. With new players entering the market all the time, clear differentiation will be crucial for

gaining a larger market share in this competitive environment.”

For good reason, the financial services industry is seeing an unparalleled level of regulatory reform, with Dubai leading the way in the region through the establishment of robust controls and measures delivered by the DFSA. Though this comes with costs to the business, I believe that it is the right thing to do for business as well as clients, and makes the industry, as a whole, stronger and more sustainable, along with raising

the levels of commitment for the service providers.

A clear way forward

He closes the discussion by reiterating their commitment to elevating their technology to allow for a unique offering and to provide a better platform for both scale and improved client experience. “All these drivers are aligning to make us more unique and more capable,” he says. “The market’s growth is assured essentially, and we are assuring ourselves of our ability to compete and build a really successful business.”

Riding India’s Wealth Management Wave –Perspectives from Arpita

Vinay, MD & Co-CEO of

Spark Private Wealth

Spark Capital, a Chennai-based mid-market investment banking and financial services company, last year took a major leap forward in its ambitions to become a top-tier wealth management firm, appointing private wealth and asset management experts Arpita Vinay and S Ganashyam as MDs & co-CEOs of the group’s Spark Private Wealth operation. They brought great experience and a successful track record of working in tandem – holding the title of MD and CoHeads at their former firm, Centrum Wealth. Spark Capital itself dates back to 2002 when it was founded originally as an investment banking advisory platform. Spark Private Wealth itself in its current form arrived about three years ago and has since built up AUM approaching USD3 billion. The concept was to leverage the group’s research strengths, knowledge and understanding of capital markets and investment banking and asset management expertise to deliver a high-quality, bespoke wealth management proposition to the growing ranks of HNIs, the UHNI community and family offices. Through its multi-family office proposition, the wealth arm also offers a forward-looking and holistic approach to these clients, providing comprehensive portfolio monitoring, investment management, as well as comprehensive estate planning & structuring advice and tax advisory services. The business is on a remarkable growth trajectory – they are hiring fast and hope to count over 130 RMs by April this year, whereas a year earlier that number stood at only 20. Hubbis met recently with Arpita to learn how she and her Co-CEO are ramping up the business across India.

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Hubbis has enjoyed hearing the articulation of many valuable insights from Arpita over many years during her 10-year tenure at leading Indian wealth firm Centrum Wealth, where from 2021, she held the title of MD and Co-Head. While there, she led Centrum Wealth to

become one of the better-known players in India’s fast-growing and rapidly maturing wealth management market.

Arpita certainly brings significant and broadly-based pedigree to Spark PWM across the HNI, UHNI and mass affluent segments - before joining Centrum Wealth, she had been Head of Premier Banking at HSBC, responsible for managing one of the

largest affluent banking propositions in the country.

Family-centric

According to its literature, Spark Private Wealth offers a holistic proposition that integrates the Spark Group’s Equity Research DNA and Investment Banking and Asset Management expertise to curate bespoke solutions for their clients. Spark PWM was formerly known as Spark Family Office and Investment Advisors (India), which gives some indication of its inclination and history helping very wealthy Indian families, business owners & promoters, family offices, new age entrepreneurs and CXOs to preserve, build and transition their wealth across the generations.

“We offer integrated and complementary capabilities in asset management, investment banking, and multi-family services to add up to a significant depth of proposition in wealth management,” she reports.

Building fast

Arpita explains that Spark PWM’s AUM is approaching USD3 billion, and the firm is in an expansionary phase, expecting to count more than 130 RMs and more than 300 staff in total by April this year. “We are driving very rapid growth,” she says. “In April 2023, the number of RMs

was just 15 and we were only about 60 strong employees in total.”

The firm works with clients in the HNI/UHNI segment of USD1-10 million in investible wealth, and many clients of far greater wealth who are served largely through their multi-family office offering which focuses on clients/families with investible wealth greater than USD 10 Mn. Today, Spark PWM is present in key Indian cities, including Mumbai, Delhi, Chennai, Bengaluru, Hyderabad, Ahmedabad and Pune.

Bringing it all together

Arpita explains more about how their key services fit neatly together for the types of clients they serve. Highlighting the needs of substantially wealthy clients, perhaps those who might have realised a sale in full or part of their businesses, she notes that they have key and wellestablished expertise and protocols around investment management, including the articulation of the Investment Policy Statement (IPS), on due diligence of products and ideas, consolidation, and reporting and financial advisory.

She explains that Spark PWM focuses heavily on high quality advice and investment curation across the public and private

« “We take ownership of all these key facets of a client’s approach to investments, guiding and nurturing portfolio construction, maintenance, monitoring and review towards the right practices in terms of wealth creation/preservation, the attainment of return objectives, and we take complete accountability for advisory across their entire portfolio.” »

ARPITA VINAY Spark Capital

domains and covering domestic and global assets. Their offering is backed by a robust Investment Policy Framework supported by research and superior execution to create, manage, and monitor portfolios to meet customer needs and investment objectives.

Best-in-class curation

Moreover, Arpita says that with its open-architecture platform, the team provides best-in-class solutions from industry-leading investment managers and specialists. “We take ownership of all these key facets of a client’s approach to investments, guiding and nurturing portfolio construction, maintenance, monitoring and review towards the right practices in terms of wealth creation/preservation, the attainment of return objectives, and we take complete accountability for advisory across their entire portfolio,” she explains.

Taking the ‘Big Picture’ perspective

Alongside this bespoke investment management offering, the firm provides estate planning & structuring advice, and what Arpita terms ‘adjacent’ services that are fully attuned to the client’s individual and family situations, as well as with their own business ownership situations. They also have an in-house team of experienced professionals to help with tax advisory and work with external parties to help as well.

She explains that all these elements also fall tidily within the firm’s family office proposition, which has been designed to provide comprehensive portfolio advice and monitoring, bespoke investment management, and comprehensive Estate Planning & Tax Services for ultra-HNI families.

Key Priorities

Arpita reports that her number one mission for the next 12 to 24 months is to smartly execute on plans to scale the firm dramatically.

“What was a 60 member-strong business last April will by this April [2024] be a 300 member-strong firm, so we need to ensure that we execute those plans and that we meet that expansion internally with better technology, processes, systems and strategies,” she explains.

Expanding the product offering is another key priority. She reiterates that the firm operates with the premise of open architecture and bestin-class product curation and as it scales up, the business therefore also needs to expand its suite of products – including more offshore products - to cater to the rising number of clients and expectations. The product suite also includes completely new offerings for clients, such as providing insurance brokerage, for which they have applied for the relevant domestic license.

Technology is another core mission, but this is not a new priority, having been consistently front of mind for many years, and then coming into even sharper focus during the global pandemic.

“Nowadays, technology for us is far more about design, for example developing a super app that will address and bypass the multiple logins that clients now have to go through at different points,” she explains. “We are now well beyond technology as hygiene, and more into imaginatively designed technology that offers genuine differentiation in the eyes of our clients. In short, technology is of huge importance to us. We have a significant team focused on that, and we are elevating our sights all the time.”

The holistic approach to UHNI needs

“We facilitate a complete alignment of their interests. where the firm’s experts can holistically address the multi-faceted challenges facing these ultra-wealthy families,” Arpita reports.

Indeed, she notes there are very often many complex strands intertwined that are all unique to each client and family. These will often include key challenges around transitioning wealth and businesses to the next generations and involve important considerations such as family and family business governance, and covering areas

such as professionalisation, succession structuring and also conflict resolution.

Understanding the nuances

“There are numerous nuances and personal issues to consider and address in so many of these situations,” Arpita comments. “But we have deep expertise in these areas, and we also work closely with some of the finest practitioners and external specialists in curating the right approaches and to help devise family charters and the right structures to execute proper planning.”

Arpita says she has a great love of articulating robust estate planning & structuring, and based on her considerable experience, highlights the family charter as a crucial element in the articulation of the type of robust approach to professional, near institutional-level planning. “In my experience, the charter needs to be written and expedited very professionally and enacted quickly,” she comments. “Otherwise, momentum is lost, and it too often just sits gathering dust.”

Win-win

She says that both the clients and Spark PWM benefit from having this type of expertise they offer, allied to the core investment management and investment banking capabilities. “Not many firms can offer this type of holistic approach to the challenges that very wealthy Indian families typically face,” she states.

She expands on this comment, noting that she is convinced that it is a major advantage for these families and also their businesses to have one set of eyes watching over all these different objectives and helping devise corporate advisory and family solutions that are intertwined and that work both for today and the future.

Up close and personal

“And it is a great advantage for us, as well,” she reports. “All these matters are really very close to the heart of the founders and promoters; accordingly, there is great value in us embedding ourselves in these deep

and very important engagements with our clients.”

She highlights a hypothetical case of a younger, perhaps more technology-centric entrepreneur. This individual might, for example, have partly monetised their first business and could be seeking help in taking that business to the next growth phase, allied to the objectives of their new shareholders. Or they might perhaps be seeking out their next personal business challenge if they have sold out in full. Or they might want to professionalise or institutionalise the ownership and control of the family business and also family assets within a singlefamily office structure.

Opening doors, seeing new avenues

Arpita explains that these types of engagements open the doors to the firm being able to connect closely to the founders and the key family or family business members and then devise bespoke solutions for them.

“They are looking for the right concepts and greatly value our ability to curate bespoke ideas for them,” she says. “In the past 6 to 9 months we have worked on five such complex and holistic types of engagements, creating solutions for families and family offices that truly work for all key parties.”

She turns her gaze away from this very wealthy type of family client who might even have a family office structure in existence, or perhaps in mind, to focus the next portion of

the conversation on their typical HNI client, someone with the equivalent of USD1- 10 million to invest.

“They are usually price-conscious and time-poor,” she explains.

“They want portfolios that are sophisticated, robust, and costefficient to assemble, including lower-fee passive strategies, as are relevant to the client’s investment objectives, investment horizon, investment experience and risk orientation. They have key return objectives in mind. They want the optionality to execute trades online or via human engagement, so clearly, we need to offer both elements and thereby provide the best and most robust digital solutions as well as deliver optimised customer experiences. Additionally, they often have certain needs relating to the next generations, such as creating a will and planning more thoroughly for the future with some basic structures. We address all these needs and objectives.”

Wind in the sails… Arpita draws the discussion to a close by reminding us how Spark PWM’s growth trajectory is being rocket-fuelled by India’s economic growth and the rise of its financial markets. “But despite all the powerful and different winds in our sails, we still need to be selective, focused and disciplined, and to make sure we address the real needs of our clients, both for today and the future,” she concludes. “The future is bright, and we are ready to grasp it with both hands.”

« “We are now well beyond technology as hygiene, and more into imaginatively designed technology that offers genuine differentiation in the eyes of our clients.” »

Getting Personal with Arpita Vinay

With a long and successful career in finance and wealth management, it is not surprising that Arpita is highly regarded, and has received several awards for her work and contributions.

An Electrical Engineer and MBA Finance from Faculty of Management Studies (FMS) Delhi, Arpita also holds the STEP Professional Postgraduate Diploma in Private Wealth – a course that focused on cross boarder succession, international taxation and family business advisory.

She takes an active interest in estate and succession planning and is a member of the Indian chapter of STEP, an international body of trust and estate planning professionals and the International Tax Planning Associates (ITPA). She is also a regular speaker in wealth management, family office and alternative product forums and seminars.

She grew up in Bokaro, an industrial city in the state of Jharkhand and which houses one of the largest steel plants in the country. She studied engineering at university and first worked as an engineer for Tata Steel at their Jamshedpur plant before studying for her MBA. She still remembers those early years in heavy industry and soon handling a team of 40 as amongst her most important formative times.

“I had to traverse the challenges of being a woman in India in engineering and heavy industry, which was really difficult but immensely rewarding, offering me in retrospect a great platform for my later career,” she explains.

After her MBA, she joined HSBC in 2004 as a management trainee and rose through the ranks rapidly to head up the Premier Banking team. She then joined Centrum in 2011 and rose to become MD and Co-Head in 2021, then signing on with Spark PWM during 2023.

She has one daughter, aged 17, who will head off to university next year. She greatly enjoys meditation and follows the Hatha School of Yoga, which focuses heavily on resilience and overcoming adversity. “I profess not to be very religious, but yoga and meditation have been a big part of my life, helping me with my career and personal life,” she says. “I believe it is essential to find time for these moments of reflection and to build mental fortitude.”

She also enjoys quiet times reading at home and says she reads roughly one book a week. A recent favourite was ‘America’s Bank’, on the history of the Federal Reserve. Another was by Ben Horowitz titled ‘Hard Thing About Hard Things’, and she also enjoyed ‘Uncommon Service: How to Win by Putting Customers at the Core of Your Business’, which she says was all about how businesses can only be exceptional in a few areas, and hence how selectivity and perspective are vital for smart strategies.

Last time Hubbis interviewed Arpita at length, she explained that travel is a great passion. Trips to farflung places such as Bolivia, Peru, Zambia, Latvia, Lithuania and Iceland are amongst the many countries she has visited. “I love exotic and fascinating places and new cultures,” she says. “Travel is wonderful for expanding one’s horizons.”

She shares her passion for travel with her husband Pritesh Vinay, a finance professional who is part of the senior management team of a large Indian conglomerate. They collaborate on researching destinations and come up with travel plans right down to the minutest detail. Together, they have explored over 50 countries. One of the more enjoyable trips came in 2023 when she visited Cancun in Mexico.

Bank of Baroda’s Wealth Management Leader on Delivering Scale and Quality across the Major Client Segments

Virendra Somwanshi, Head of Wealth Management & Capital Markets at the major state-owned Indian financial institution Bank of Baroda, is a veteran of the private banking and wealth management market in India. He has worked in the industry for more than 26 years, including nearly 18 years at Citibank in multiple business areas across consumer banking, wealth management, securities and investment management in both India and Singapore, after which he spent three years at Bank of Baroda Capital Markets before heading off for a stint as CEO of Motilal Oswal Private Wealth Management, and returning to his current role in December 2020 to complete what he says is an exciting mission to build the bank’s wealth management platform from within a vast edifice that includes more than 8000 branches and a customer base estimated at 10% of the entire Indian population. Since he arrived at the Bank in late 2020 at the height of the pandemic, he has devised and articulated a mission of creating a ‘new era’ agile and fit-forpurpose wealth management offering within what is a traditional banking behemoth, a mission for which he says he is well-supported at the very highest echelons within the institution. It is little surprise then that he needs both great stamina and endurance to achieve these goals, and for that, he draws upon his regular marathon running.

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Find out more about Bank of Baroda

Somwanshi opens the discussion by reminding us of the sheer scale of Bank of Baroda, one of the largest banks in the country with presence across 17 countries, 8000+ branches, 165 million customers and 70,000 plus employees. The wealth business headed by Somwanshi covers the entire spectrum of clients ranging from mass affluent to HNI and UHNI clients.

Owing to Bank of Baroda’s mammoth branch network, the Wealth Business too is spread across the length and breadth of the country. Through ‘Baroda Radiance’ the Bank caters to its HNI & affluent client segment in the top 30 cities by offering value added financial services through a

dedicated Relationship Manager. To cater to Baroda Radiance customers beyond the top 30 cities, the bank has instituted a centralized digital hub through which relationship managers connect with clients virtually enabled by technology. With the recent launch of its state of the art digital investment & insurance platforms namely ‘SmartInvest’ & ‘SmartInsure’, Bank of Baroda is positioning itself to expand its digital footprint, offering a hybrid model of reaching clients across India’s tier two and three cities.

Scale and access

“Many wealth managers do not have our scale and access,” he says. “We combine direct access through our network with digital connectivity to reach as many of these actual and potential clients as possible. A key question for the bank has always been how to leverage our vast banking customer base and deliver wealth management products and services to as many people as possible across different segments of wealth. And that is what we have been doing since this operation began in earnest close to five years ago. We have made huge progress, but there is still a long way to go.”

He explains that with the bank covering such a vast cross-section

of India’s dynamic demographics, segmentation has proved to be central to their approach to wealth management. And it has required a careful approach to hiring the right teams for each segment. “The wealth business is almost like a private business within this vast state institution, and it requires specialised skills around - relationship management, investments expertise, financial planning and other key areas of focus,” he comments.

Making headway

He says progress has been encouraging, and it has been an exciting journey. “I have drawn on my long experience at Citibank as a major global institution to build the right teams and to develop the right platform here,” he reports. “For example, on the investment side, we are now in the top 15 operators in India, moving towards the top 10, and then the top five, we hope. Five years ago, we were not counted among the leading wealth players.”

Clear segmentation, dedicated offerings

Drilling down into more detail; he also explains that they had created their premium banking brand, Baroda Radiance, as the core offering for the emerging affluent and lower tier HNI

« “We have the skills and capability for greater product innovation, but realistically there is incredible untapped potential within the client base for the more established investment products.” »

VIRENDRA SOMWANSHI Bank of Baroda

segments, and they later launched Baroda Radiance Private Clients for customers with over USD2 million to invest.

Somwanshi zooms in on Radiance Private, noting that it is a completely differentiated offering from the Baroda Radiance proposition. He explains that key products in this segment include investments and protection, but there are also other areas covered and which are in strong demand, such as lending, trade and FX.

He also points to the Bank of Baroda Capital Markets operation -, which delivers a full range of institutional-level broking, capital raising and investment banking services, which many HNI clients can use. Additionally, the bank seeks to leverage access to the fullest range of banking products.

Horses for courses…

Turning to their investment offering, Somwanshi explains that they cater to many clients across different segments, and entered the wealth market only in recent years, and need to move carefully to make sure they deliver the types of products that their customers need today. “We are a relatively late entrant, and our focus has largely been on aligning our wealth management proposition with the industry’s best offerings, while ensuring that we fully align with customer needs and expectations,” he says.

He explains that the bank’s learning curve involves transitioning from basic mutual funds to more sophisticated products like Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs). However, this transition is

Getting Personal with Virendra Somwanshi

Virendra Somwanshi comes from Aurangabad in the state of Maharashtra, and that is where he completed all his studies through to an engineering degree and then moved to Pune for his MBA at the Symbiosis Institute of Business Management.

“I started my working life as a Mechanical engineer in SKF Bearings Ltd,” he recalls, “but MBA opened doors for me and changed my horizons, and it was not long before I joined Citibank; I then stayed with them for close to 18 years, most of it in India except for a short stint in Singapore.

He then joined Bank of Baroda Capital Markets in 2017 at the outset of a major transformation, where he was instrumental in conceptualising, designing and launching the wealth management and equities platform by creating various affluent and emerging affluent client segments across the Bank’s domestic and NRI customer base to leverage Bank of Baroda’s extensive network of branches. For a year, he had moved as MD & CEO of Motilal Oswal Private Wealth post which he returned back to Bank of Baroda to carry forward the transformation agenda. “This a great challenge, being such a vast and state-owned bank,” he says. “But in scaling up and developing the wealth management business, we are unravelling what is truly a massive opportunity here.”

Happily married, they have two children, a son aged 16 and a daughter of nearly 19 who is already studying engineering in the UK.

In his spare time, he loves reading, watching Bollywood movies, and also plays cricket and other sports. A favourite recent Bollywood movie was ‘12th Fail’, which has been winning nationwide plaudits.

For the past five-plus years, he has been a running enthusiast, completing several marathons. He reports he ran in the Tokyo marathon last April, that he will run in the New Delhi Marathon in Feb and the London marathon this coming April,

“Yes, as you can see, I remain entirely struck by the mid-life running bug!” he quips. “And yes, as I mentioned last time we talked, I continue to sustain yet more injuries; in fact, I broke my wrist after my Tokyo run last year, resulting in an operation and the insertion of a titanium plate. That just added to my long list of injuries, but I remain determined as I believe the rewards continue to outweigh all those negatives.”

He also has some of his travel bucket list still to fulfil and counts Antarctica and Latin America as two major trips he is planning. Amongst his favourite trips, he recalls a small white beach village in South Africa named Hermanus as one of the most beautiful places he had ever visited. “South Africa was a wonderful experience, and that beach and village was a genuine highlight,” he says.

gradual, and there is substantial potential for expansion by gradually incorporating more innovative and specialized products, rather than shifting focus to them entirely at once.

Foundational products first

“We have the skills and capability for greater product innovation, but realistically there is incredible untapped potential within the client base for the more established investment products,” Somwanshi reports. “We are really focusing on the huge mass affluent market and promoting these foundational financial products and deepening penetration of mutual funds, PMS, and AIFs, rather than focusing heavily on highly innovative products.”

Digitisation and the client experience

As to access and the client experience, he also notes that he is very pleased with the progress they have been making in their digital transformation. “As we drive towards a fully digital journey for our clients, from onboarding through execution and reporting, we are making rapid advances. For

example, clients no longer need to provide any physical signatures for account opening or KYC and AML processes; this not only simplifies the onboarding experience but also helps to free up client relationship management capabilities so they can focus on adding value and being more productive.”

He reports that their digital transformation journey had significantly improved customer satisfaction. “It is not only onboarding,” he says. “Customers can execute and then they can independently access and monitor their portfolios through the bank’s app and website, reducing the need for more administrative type communication with relationship managers for information and other updates. All these advances improve the client and the relationship manager experience, productivity and satisfaction.”

Looking ahead to international expansion

International coverage is also a key objective. “We are the only Indian bank with a local license in the UAE, where we have five branches serving our large base of NonResident Indian (NRI) customers,” he reports. “Building from that presence, the bank is also aiming

to extend more services in the UAE, and explore opportunities in other markets.”

He says a key element of this strategy is leveraging GIFT City in Gujarat, which in on track to become an international hub for banking, allowing the bank to serve international clients, including NRIs and foreign investors targeting India, as well as to facilitate Indian clients investing overseas, largely through dollar-based funds and products and subject to the government’s liberalised remittance scheme.

Solid growth

The emphasis of the wealth business more towards the mass affluent and lower tier HNI customers is evident from the numbers Somwanshi proffers. He reports that they have over 200 RMs presiding over a total AUM that stands currently at about USD 1.6 billion, that number calculated entirely on investment accounts. “If I were to add the Banking assets, then the total AUM would rise to USD 5.2 billion,” he explains.

Somwanshi draws the conversation towards a close by

« “We are the only Indian bank with a local license in the UAE, where we have five branches serving our large base of Non-Resident Indian (NRI) customers. Building from that presence, the bank is also aiming to extend more services in the UAE and explore opportunities in other markets.” »

focusing on some key priorities. These include the ongoing digital transformation and, most specifically, encouraging greater adoption by the team. “The better our teams engage with these solutions, the better the outcomes for them, our clients and the bank,” he reports. “This is a challenge and one we are addressing, and it is helping us build the customer base, as digital

connectivity is central to scale and the overall proposition.”

Growth requires new talent

His final word is on the quest for talent, an industry-wide challenge. “RMs with the right skills and experience are difficult to find and retain,” he says. “This challenge is not unique to us, but what we can offer in terms of a more unique

selling point is the huge client base and the massive potential ahead, opening the doors to rapid client acquisition for new team members. We have the platform, the products, the technology and the processes and as we build the RM talent pool, they have a ready set of existing and potential clients they can serve. We believe this is a great vehicle for their careers and their aspirations.”

For further reading on Bank of Baroda’s wealth management offering, see these Hubbis articles:

From 2023: https://hubbis.com/article/delivering-wealth-management-at-scale-andwith-customisation-across-india-s-vast-wealth-management-landscape

From 2022: https://hubbis.com/article/prominent-bank-of-baroda-leader-examines-rapid-expansion-of-the-indian-wealth-market

From 2021: https://hubbis.com/article/bank-of-baroda-builds-new-age-offerings-acrossthe-length-and-breadth-of-india-says-head-of-wealth-management-virendra-somwanshi

Nuvama’s Anshu Kapoor on Riding the Surging Indian Wave of Globalisation and Diversification

Anshu Kapoor heads the roughly USD 1 billion AUM alternatives-focused asset management business within Nuvama Wealth Management, now India’s secondlargest independent wealth firm, presiding over total Assets Under Advisory (AUA) of over USD 35 billion. His alternatives operation, which he has built from the ground up since 2021, covers public markets, private equity and commercial real estate investment solutions, all of which are enjoying rising demand in India amongst increasingly adventurous HNW and UHNW clients, as well as amongst international investors and NRIs. He also sits on Nuvama’s Executive Committee and is at the forefront of several key strategic initiatives. Anshu is a veteran of India’s wealth management market, with a career spanning over 25 years and having started the private wealth business at the Edelweiss Group (now Nuvama) in 2010. Before that, he held prominent positions in wealth management at Merrill Lynch, and across consumer banking and capital markets at HSBC and ICICI Bank. At Edelweiss, he was credited with scaling the wealth business over seven years to USD 17 billion in AUA, propelling the former Edelweiss to the third-biggest independent firm by the time it became Nuvama. Since 2021, Anshu has been on a mission to build India’s largest and most respected asset management business. Hubbis met with him recently to learn about his progress, his outlook and his passion for building the asset management business from the ground up.

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Find out more about Nuvama

By way of background, Nuvama Group is listed in India and has three core businesses. The wealth management business with USD 35 billion of AUA, the asset management business operating three funds and with approaching USD 1 billion of AUM, and the capital markets operation, where they are the largest domestic institutional brokerage house by volume. Nuvama is represented in more than 100 cities in India and has over 3500 employees.

The transition to Nuvama came in 2021 when Edelweiss sold out 56% control to private equity firm PAG and subsequently listed in 2023, and today boasts a market capitalisation equivalent to roughly USD 1.5 billion.

Key Priorities

Anshu reports that his first mission is to build the product suite across all key asset classes including public markets, private equity, real estate, private fixed income and credit, and infrastructure.

Within each asset class, they are also building the offering; for example, with private equity, they began with pre-IPO exposures, gradually moving through to late-stage PE, growth PE, and soon adding venture credit.

In equities, they began with the long-short product, then added long-only products, an absolute return product and other variations on the theme. “The mission is to keep rolling out more relevant products, and building a world class platform,” he states.

The second priority is expanding the distribution network for Nuvama Wealth in India and internationally. They are now working with over 20 partners, including banks and other wealth management firms at home and abroad.

The third priority is performance. “Above all, we are an asset management business, and the performance of all our strategies is a universal priority for us,” he explains.

In the core wealth management business, their HNW and UHNW private clients include New Age Entrepreneurs, Business Owners, Family Offices, CXOs, Corporate Treasurers, and many others. The firm caters to more than 3000 of India’s wealthiest families and provides advice to some 800,000 HNWIs and mass affluent clients.

India’s rising global prominence

Anshu highlights the rising prominence of India amongst foreign investors. He cites strong GDP growth, a roughly USD 3.5 trillion economy, and a huge market value of USD 4.5 trillion as core drivers, along with young and growing demographics, surging

« “India is firing on all cylinders. The equity markets are booming and diversifying, and government bonds are soon to be included in the JP Morgan Bond Index. Little wonder then that foreign investors are increasingly drawn to India’s capital markets, which are becoming deeper, more sophisticated, more institutionalised and growing apace.” »

ANSHU KAPOOR Nuvama

private wealth and rising corporate profitability amongst the universe of over 7000 listed stocks, amongst many other positives.

“India is firing on all cylinders,” he says. “The equity markets are booming and diversifying, and government bonds are soon to be included in the JP Morgan Bond Index. Little wonder then that foreign investors are increasingly drawn to India’s capital markets, which are becoming deeper, more sophisticated, more institutionalised and growing apace.”

Building on surging demand

He then zeroes in on the asset management operation over which he presides. “We identified a huge shortage in high-quality products in asset classes such as private equity, commercial real estate, private credit, infrastructure and other areas,” he reports.

As a guide, he reports that private equity is today a roughly USD 275 billion asset class in India, new funds of approaching USD 6 billion flow to real estate annually, and infrastructure is the recipient of about USD 11 billion every year.

A great opportunity

“Most of that is from foreign capital channelled by funds into India, and that means, surprisingly, that Indian HNW and UHNW investors have not been able to access these asset classes. In the US, domestic institutions lead these asset classes, but not in India. Therein lies the opportunity.”

At the same time, Anshu reports that private savings in India are growing by about USD 750 billion every year, and clients are becoming increasingly interested

Getting Personal with Anshu Kapoor

Born in the biggest state in India, Uttar Pradesh, Anshu attended university in Delhi and then completed his CFA studies, also in Delhi. He joined ICICI Bank, when it was one of the earliest private sector banks in the country, before moving to HSBC, working initially on internet trading, a new innovation to India at that time.

“I then moved to the HSBC Private Bank in Dubai for two years, a great experience, before returning to India to join Merrill Lynch, and then actually back to HSBC here,” he reports. “I love the world of wealth management; it is in my bones.”

Kapoor is married with three children – their son is now 22, they have a daughter of 20 and the youngest boy is now eight years old.

Anshu also continues to love reading, with a recent favourite being The House of Morgan, about the history of JP Morgan. “I am gaining inspiration for the House of Kapoor,” he quips, jovially.

He continues to focus on his fitness, including trekking in the hills and jungles, mountain biking and recently adding yoga to his list.

Anshu and the family love travel, and he cites some favourite places, such as Phuket (the beaches, the accommodation and the food), and Scotland (the air and the single malt whiskies). Recent shorter trips include a return to Hong Kong to visit Disney World for their youngest child and a local trip to Udaipur in Rajasthan to see the famous Lake Palace that floats on an island in the middle of a lake.

in newer asset classes, newer solutions. “This is the supply chasm into which we are delivering high-quality products to Indian customers in some of these asset classes,” he states. “Overseas investors are similarly keen to expand their exposures, especially the NRI community. Hence, we are building this product platform.”

Growing apace

He reports that India’s asset management industry in India is doubling in size every five years, with the mutual fund market now

valued at over USD 620 billion, and including alternatives and foreign investments, the total approaches one trillion dollars.

“But despite this, only about 10% of India’s annual financial savings are invested in capital markets, meaning a huge growth potential as the financialisaton of private wealth takes place.”

He expands further on the flow of foreign funds into India, remarking that the major international institutional investors have always had access, with the key conduits through funds

registered in Mauritius, Singapore, and other jurisdictions.

Avenues to pent-up private foreign and NRI inflows

“But private wealth from overseas has always found it more challenging, so we are opening the doors to more HNWIs, family offices, and others that want to increasingly participate in India’s markets,” he reports. “It will not be long before we are a USD 5 trillion GDP economy, and that means India is an asset class in its own right, not just one of the smaller emerging markets. That will dawn on investors worldwide very soon, leading to an explosion of interest and demand. And that means a proliferation of different asset classes, products and far greater avenues to access India.”

Looking to the world

He points to GIFT City as part of this enablement, noting that it offers an offshore infrastructure and conduit within India’s borders to expedite these inward or outward flows. “It is not so far from Mumbai, it is regulated, it has a talent pool for staff, it is lower cost, and there is a strong impetus for its development at the national level,” he reports.

He adds that while they are now building their capabilities in GIFT City, they are ramping up their overseas marketing, especially through Dubai as a rising hub for global capital, especially given the huge NRI community there.

First stop, Middle East

Anshu says Middle East is not far by air and not only has a big

and wealthy NRI community but is home now to more and more private wealth from within the region and from overseas, and with a surging volume of family offices. “We are first building our presence in the Middle East and then we will shift attention also to Asai and other parts of the world,” he explains.

A perfect fit

Anshu closes the conversation by remarking how much he is enjoying building the asset management business from the ground up. “This was a blank canvas, and we are filling it with many different colours and hues amongst hr world of alternatives,” he says. “These are exciting times in India, and the opportunity to build with this type of momentum and demand for diversification is wonderful.”

« “It will not be long before we are a USD 5 trillion GDP economy, and that means India is an asset class in its own right, not just one of the smaller emerging markets. That will dawn on investors worldwide very soon, leading to an explosion of interest and demand. And that means a proliferation of different asset classes, products and far greater avenues to access India.” »

Q&A with 360 ONE’s Navin Upadhyaya: Insights into Leadership, Growth, and the Future of Wealth Management

Navin Upadhyaya is the Chief Human Resources Officer (CHRO) at the leading Indian firm 360 ONE, the rebranded IIFL Wealth & Asset Management. Working in a prominent role in such an important and dynamic organisation in this market –total AUM is over USD54.6 billion – Navin is passionate about his role in attracting, nurturing and keeping hold of talent to keep the business at the forefront of India’s dynamic wealth markets, which he believes are poised for dramatic growth and maturation. This exclusive Q&A session delves deep into Navin’s strategic vision for 360 ONE which includes 360 ONE Wealth, 360 ONE Asset and 360 ONE Global, his leadership philosophy, and the innovative approaches the firm is adopting to navigate the complexities of the wealth and asset management industry. From experiences in prioritising tasks in a fast-paced startup environment to scaling operations across India’s vast landscape and attracting top talent in a competitive market, Navin shares valuable insights into the challenges and opportunities that lie ahead. Moreover, his thoughts on digital disruption in the wealth management sector and preparing the workforce for the future of work reflect his forward-thinking approach and commitment to excellence. As we explore Navin’s perspectives, we also get a glimpse into the person behind the professional. His journey from the multicultural township of Jamshedpur to leading HR initiatives at one of India’s most innovative wealth management firms is a narrative of personal growth, professional dedication, and a relentless pursuit of excellence.

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Find out more about 360 ONE

Can you characterise your mission as CHRO at 360 ONE Wealth?

First, a very quick overview. 360 ONE Wealth sits within 360 ONE, which is the relatively new brand name for what used to be IIFL Wealth & Asset Management. Our new brand is a reinforcement of what we have always delivered to our clients – innovation, dedication, quality, integrity, scale and excellence.

As India’s leading wealth and alternates-focused asset firm, we have more than US$54.6 billion in assets under management and help over 7,000 HNI and ultra-HNI families, manage, grow and preserve their wealth and legacy.

Moreover, we see 360 ONE as not just another financial firm; we strive to be a forward-thinking enterprise seeking to redefine wealth management in India and beyond. With a strategic focus on digital innovation and personalised client services, the firm is poised to cater to the burgeoning class of high-net-worth individuals (HNIs) seeking sophisticated, tech-driven and hybrid financial advice. My role at 360 ONE is far more than the old school idea of HR; we are a business creator and facilitators, aligning talent management with strategic business initiatives to drive growth, innovation, and a culture of continuous learning.

In such a sizeable and rapidly expanding firm like 360 ONE Wealth, particularly now with its ventures in India and also Singapore and Dubai, how do you approach aligning your more basic missions with long-term strategic planning?

The essence of aligning these two missions lies in the art of prioritisation and proactive planning. My

day revolves around making sure the foundational aspects of our operations are robust and secure, allowing us to build on a stable platform. From there, the focus shifts to what lies ahead, not just for the day or the week but looking further into the future to anticipate the needs of our rapidly evolving business landscape.

Given what I can call our dynamic and ambitious growth trajectory, particularly our efforts to enhance digital offerings for high-net-worth (HNI) clients in India and expand our presence in international markets like Singapore and Dubai, the ability to multitask effectively while maintaining a strategic outlook becomes paramount. This involves a dynamic approach to management and leadership, where adaptability and foresight are critical. Engaging with team members across different geographies, understanding the nuances of local markets, and aligning these with our overarching strategic goals are all in a day’s work. It is about striking the right balance between addressing immediate needs and laying the groundwork for future successes.

The Indian wealth market presents a significant opportunity for leading and also new players. How is 360 ONE Wealth planning to scale its operations and capitalise on this potential?

India’s wealth management landscape is vast and, rather untapped, especially beyond the metro cities in what you might call Tier 2 and Tier 3 cities. Here, the challenge is not just about scaling operations but doing so in a way that aligns with our core values of purpose, passion, and pride. Our hiring philosophy is geared towards identifying individuals who not only possess the technical skills required but who are also deeply aligned with our ethos. This approach ensures we are not just adding people for the sake of having more people but building a team that shares our vision and commitment to excellence.

Our strategy involves continuous engagement with potential hires to ensure a mutual fit. This is particularly important as we expand our digital and global footprint. By fostering a culture of continuous dialogue and feedback, we aim to build a team that’s not just capable but also committed and culturally aligned with our goals. Whether leveraging our existing networks or engaging in new platforms, our

NAVIN UPADHYAYA

360 ONE

« ‘‘Our hiring philosophy is geared towards identifying individuals who not only possess the technical skills required but who are also deeply aligned with our ethos. This approach ensures we are not just adding people for the sake of having more people but building a team that shares our vision and commitment to excellence’’ »

focus remains on attracting talent who can contribute to and thrive in our dynamic, growthoriented environment.

With the wealth management industry being highly competitive, what strategies do you employ to attract and retain top talent?

First, we are a well-established firm with deep reach and a fine reputation. That certainly helps! But in terms of specifics, attracting and retaining top talent in the wealth management sector is challenging these days, given the plethora of options available to high-calibre professionals in the world of finance in India. Our approach at 360 ONE Wealth centres around leveraging our unique circle of influence, which encompasses our robust network and the strong platform we have built. This network not only helps us identify potential candidates but also plays a crucial role in engaging them in meaningful conversations about their career aspirations and how these align with what we offer.

In response to the industry’s evolving needs, we have refined our performance evaluation to focus on growth, resilience, and agility. This includes rewarding behaviour that contributes to generating extra value for clients and the firm, aligning incentives with our overarching goals of a quality business, annual recurring revenue, and advisory excellence.

We place a strong emphasis on cultural fit, understanding that bringing someone on board is just the beginning of their journey with us. Retention, particularly of high performers, is tackled through a comprehensive strategy that includes continuous engagement, recognising and addressing their needs, and providing clear paths for career advancement.

Our management style is characterised by advocacy and support rather than hierarchy, ensuring our team feels valued and understood. This holistic approach to talent management has been key to our success in not just attracting but also retaining the best in the industry.

To summarise, our talent philosophy is clear and centres around hiring individuals who embody purpose, passion, and pride. These are the traits we believe are essential to navigate the complexities of the wealth ecosystem in India. By maintaining continuous dialogue and ensuring a cultural fit, we aim to build a team that resonates with our core values and possesses a relentless passion to deliver exceptional results for our clients.

Given the rapid digital transformation in the wealth management sector, how is 360 One Wealth preparing its workforce for the future?

Digital disruption is reshaping the wealth management industry, and at 360 ONE Wealth, we are embracing this change head-on. Our strategy involves building a comprehensive digital platform that caters to the new generational needs of our clientele while also equipping our team with the skills and knowledge to thrive in this new environment. This includes training in emerging technologies such as artificial intelligence and machine learning, ensuring our workforce is not only adept at using these tools but also understands how they can enhance our service offerings.

Moreover, our focus extends beyond just technical skills to include digital literacy and acumen. We are investing in programs that foster a deep

understanding of digital platforms and how they can be leveraged to improve client engagement and service delivery. By integrating digital training into our overall development plans, we aim to ensure that our team is prepared for the future of work in wealth management, ready to meet the evolving needs of our clients with innovation and expertise.

How do you see the opportunity in the Indian private wealth management sector, and what makes 360 ONE Wealth wellpositioned to capitalise on this growth?

The opportunity in the Indian private wealth management sector over the next 6 to 10 years is immense. The economic vibrancy and the entrepreneurial zeal within the country create a fertile ground for wealth management services. Our strategic focus on digital innovation positions us uniquely to tap into this potential. The digital platform we are building is designed not just to attract the new generation of HNI and ultra-HNI clients but also to provide them with a service experience that is unparalleled in the Indian market.

Moreover, our approach to talent development, with a strong emphasis on understanding and adapting to the changing needs of both our clients and our employees, sets us apart. By focusing on building a future-ready workforce and continuously refining our service offerings, we are not just keeping pace with the market; we are aiming to set new standards in the industry. Our commitment to excellence, innovation, and a client-centric approach positions 360 ONE Wealth to not just capitalise on the current opportunities in the Indian market but to lead the way in defining the future of wealth management in the country.

From the HR perspective, what do you consider the vital elements for success in India’s high-growth wealth markets?

To encapsulate the key strengths that I believe are essential for any wealth management firm in India to thrive and expand, it is crucial to focus on several foundational elements that cater to the industry’s evolving landscape., Attracting and nurturing talent that embodies a blend of purpose, passion, and pride is paramount. This ensures not only a skilled workforce but also one that is deeply aligned with the firm’s vision and the dynamic needs of the wealth management ecosystem. At 360 ONE, we foster equality, diversity, inclusion and empowerment to bring home continuous innovation @workplace and varied ideas from various facets of life. And we take immense pride in stating that our diversity ratio stands at 10% higher than the BFSI industry benchmarks.

Leveraging an extensive circle of influence to engage in meaningful dialogues with potential talent is fundamental. It is about creating an environment where mutual aspirations and visions converge, ensuring that the talent pool is not just proficient in their roles but also a perfect cultural fit for the firm’s ethos. This strategy is vital in a competitive landscape like India’s, where the right talent can significantly influence a firm’s trajectory.

Addressing the challenges and tapping into the vast opportunities, especially in important, more mature overseas markets like Singapore and Dubai, necessitates a multifaceted approach. Initiating programmes that tap into university talent, integrating young professionals through rotational programs, and fostering a generational talent pool that is adept in digital and client engagement strategies are critical moves. These efforts are geared towards bridging the

« ‘‘The economic vibrancy and the entrepreneurial zeal within the country create a fertile ground for wealth management services. Our strategic focus on digital innovation positions us uniquely to tap into this potential.’’ »

generational gaps and catering to the diverse needs of clients from various demographics.

Emphasizing a ‘performance plus’ philosophy, where growth, resilience, and agility are rewarded, is another critical factor. Moving beyond traditional revenue-based incentives to a model that celebrates behaviour contributing to the firm’s and clients’ success marks a significant shift in how performance is measured and rewarded.

Moreover, the digital transformation sweeping across the wealth management sector cannot be overstated. Investing in digital literacy, enhancing client engagement, and continuously adapting strategies to meet the rapidly changing needs of

clients and employees are non-negotiable for firms aiming to lead in this space.

Looking ahead, the next decade in India presents an unparalleled growth opportunity for the private wealth management sector. The economic vibrancy and entrepreneurial spirit form a fertile ground for innovation and expansion. For a wealth management firm to capitalize on these opportunities, a focus on digital acumen, deep client engagement, and fostering a culture of empathy and continuous learning will be the pillars of success. These elements collectively will not only drive a firm’s growth but also inspire a new wave of talent to contribute to the evolving narrative of wealth management in India.

Getting

Personal with Navin: A Journey of Growth, Learning, and Diversity

Navin shares his life’s journey, offering insights into his upbringing, career highlights, personal life, and passions. Born in India, Navin’s early years were shaped by the diverse and cosmopolitan environment of Jamshedpur, a township renowned for its association with the Tata empire. This setting laid the foundation for his appreciation of multicultural interactions and his understanding of India’s vast demographic landscape.

Educated in the steel city owned by Tatas, Navin was immersed in a melting pot of cultures from an early age. He recalls the positive impact of growing up in Tata’s township, where he interacted with a broad spectrum of people. His academic journey took him from the east to the west of India, culminating in higher studies in Pune, known as the “Oxford of the East.” Here, he pursued his graduation from Fergusson College and a Master’s in HR from Pune University, experiences that enriched his perspective on India’s diverse talent communities.

Reflecting on his career, Navin highlights his significant contributions to the banking and financial sector in India, a journey marked by pivotal roles during a period of rapid growth and restructuring. He prides himself on managing the emotional dynamics of teams during times of change, emphasizing the importance of continuous learning and resilience in navigating career transitions.

Navin’s personal life is equally vibrant. Married to Dharini, a banker-turned-entrepreneur, she runs a music school in India, he is the father of Arya, a passionate footballer. Beyond his professional commitments, Navin is an ardent supporter of the Indian cricket team, finding relaxation and excitement in equal measure in watching replays of matches and following series keenly. He also dedicates time to personal growth, engaging with learning apps and platforms like HBR and McKinsey, which offer insights into leadership, employee retention, and the future of work.

Navin’s story is a testament to the power of diversity, education, and the constant pursuit of personal and professional development. His experiences underscore the importance of being adaptable, emotionally intelligent, and self-aware in today’s ever-changing world.

Navigating India’s Evolving Wealth Landscape: A Comprehensive Overview with Aman Rajoria

In India’s maturing, diversifying, and fast-expanding wealth management sector, any competitor worth their salt needs to be on top of their game. Using cricketing terminology that every Indian would understand, Aman Rajoria, armed with decades of high-level experience and having batted on many different wickets, seems to be playing Aditya Birla Finance Limited (ABFL) for a long and impressive innings. Indeed, as Head of Wealth & Capital Markets Group at ABFL, he has since joining in 2022 been instrumental in steering ABFL’s wealth and capital markets business towards new heights of success and innovation.

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Find out more about Aditya Birla Finance Limited

Aditya Birla Capital: A Foundation of Strength

Aditya Birla Capital (ABC) represents the financial services arm of the Aditya Birla Group, one of India’s top five conglomerates, and serves as a solid foundation for Rajoria’s strategic initiatives. Under this umbrella, the wealth division, housed within Aditya Birla Finance Limited (ABFL), a leading non-banking financial company (NBFC), benefits from the conglomerate’s vast resources and reputation. This strategic positioning allows Rajoria to focus on and leverage the group’s diversified business portfolio, including asset management, insurance, and brokerage services, to offer a comprehensive suite of financial solutions to a wide range of clients.

“We remain a plain vanilla wealth outfit, focusing solely on what’s in the best interest of our clients,” Rajoria asserts, emphasising the division’s commitment to an open architecture model. This approach ensures unbiased investment solutions, free from the influence of product manufacturing, and aligns with the group’s overarching

Key Priorities

Rajoria outlines his bold and ambitious roadmap for the next three years. With a clear vision and strategic initiatives in place, Rajoria aims to significantly amplify the firm’s Assets Under Management (AUM) and enhance its geographical footprint through collaborative efforts.

“Our top priority for the next three years is to significantly scale our wealth business. We have set a lofty goal to increase our AUM from the current $3 billion to $7 billion by 2026,” Rajoria states. “This ambitious target is not just about numbers; it is a testament to the firm’s commitment to deepening its market penetration and enhancing value for our clients.”

Rajoria underscores the importance of accessibility and local presence in wealth business . “We’re planning to double our footprint by end of next year,” he reveals. This expansion is pivotal for catering to a wider client base and tapping into new markets, ensuring that ABFL’s services are within reach of potential clients across India’s diverse landscape.

Innovation in the service delivery and client engagement are at the forefront of Rajoria’s strategy. He highlights the firm’s forward-thinking approach to technology and collaboration, “We’re exploring collaborations with small banks and large corporates to create investment platforms tailored to their clients and employees.” This includes the development of a bespoke wealth app and the use of an interactive chatbot, which allows clients to make investments, view their investment holdings, and access market information seamlessly.

“The chatbot has been trained with over 10 million plus training examples specific to finance domain. It is an interactive and selflearning bot available in multi lingual languages helping us connect with regional clientele not just for information but for investing as well,” Rajoria adds, emphasising the hybrid blend of technology and personal approach that he says help to set the firm apart.

Additionally, Rajoria also sheds light on a holistic cross-sell strategy, dubbed PIFA, which stands for Protection, Investments, Financing, and Advising. “We offer a comprehensive suite of solutions, from investments and insurance products, financing options, and even assisting clients on writing wills or setting up family trusts,” he explains.” This strategy underscores the firm’s dedication to providing a one-stop solution for all financial needs, with the aim of further enhancing client engagement and satisfaction.”

AMAN RAJORIA

Aditya Birla Finance Limited

goal to operate transparently and in the best interest of its clientele.

Segmenting Success: Catering to a Diverse Clientele

Rajoria’s strategy for wealth vertical is meticulously segmented, catering to ultra-high-net-worth individuals, high-net-worth individuals, mass affluent clients, and corporate entities. This segmentation enables tailored strategies that address the specific needs of each group, leveraging digital innovation to enhance client engagement and service delivery.

“We manage, acquire, and service retail clients digitally, showcasing our commitment to leveraging technology to streamline processes,” he explains. The corporate treasury solutions vertical further highlights his adeptness at providing investment guidance to large corporate and institutional clients, showcasing a comprehensive approach to the business. Moreover, remember that many corporates are owned and controlled by people who either are or could be UHNW or HNW clients for their own wealth needs.

The Digital Frontier and Beyond

Digital transformation is a cornerstone of Rajoria’s approach, with a focus on digitising client onboarding and investment management processes. This strategy not only enhances operational efficiency but also aligns with the evolving expectations of modern investors. “Digital transformation in our operations isn’t just a strategy; it’s our commitment to staying relevant and responsive to our clients’ evolving

Getting Personal with Aman Rajoria

Aman Rajoria brings a refreshing blend of professional acumen and personal passions to the table for the business he heads and for his family.

Born in the iconic city of Agra, famous for the Taj Mahal, Aman’s roots are deeply embedded in a place known for its monumental love story. His educational journey of Mathematics (Hons) and Master in Finance, further augmenting his expertise with a Certified Financial Planner certification. This solid foundation propelled him into a distinguished career in banking and finance, marking the start of a journey filled with achievements and milestones.

Over a span of 29 years, Aman has been a pivotal part of three organisations, a testament to his stability and dedication in the ever-evolving finance sector. His career kicked off in the bustling environment of a boutique investment banking firm, a startup that quickly became a leader in its field under his contribution.

A significant chapter of his career unfolded at Standard Chartered Bank, where he spent 23 years shaping the wealth and private banking divisions, culminating as the Managing Director and Head of Private Bank in India. He then embarked on a new adventure with the Aditya Birla group, steering their wealth and capital market businesses since July 2022.

Family plays a central role in Aman’s life, with two grown-up sons already following their own ambitious paths in finance and commerce. Outside the office, Aman’s life is far from monotonous. A passionate cricketer, he not only enjoys watching the game but also actively participates, representing both Standard Chartered Bank in the past, and now the Aditya Birla Group.

His has been an exemplary and fascinating journey for someone who adeptly balances a successful career in finance with a rich tapestry of personal life and interests. From the historical alleys of Agra to the financial boardrooms, Aman’s story is one of achievement, passion, and continuous growth.

needs,” Rajoria states, highlighting the firm’s proactive embrace of digital innovation.

He adds that they help their Indian clients build their offshore portfolios through advanced digital platform, which emphasises our commitment to providing comprehensive investment

solutions. “This approach is critical in a market where digital engagement and accessibility are increasingly becoming differentiators.”

Growth Aplenty in India’s Bustling Wealth Markets

Rajoria drills down into some key nuances of India’s dynamic market,

poised as it is for unprecedented growth, with economic indicators and market dynamics signalling a golden era for wealth creation and private wealth. As this transpires, wealth providers such as ABFL needs to adapt to changing times including the transformative shift in investment behaviour.

India’s economic landscape is witnessing a remarkable surge in the affluent and ultra-high-networth individual segments. “Most economic data and publications highlight an expected doubling in the number of affluent clients, those with wealth between 1 million and less than $30 million, in the next five years,” Rajoria explains. This growth isn’t confined to the affluent; the ultra-high-net-worth segment, with wealth exceeding $30 million, is anticipated to see a 60% increase.

Navigating Growth with Precision

With an eye on scaling the business, Rajoria leverages ABFL’s extensive network, spanning over 400 offices in more than 350 cities across India. This vast presence, coupled with a strong digital offering, enables the firm to cater to clients nationwide, transcending the limitations of physical relationship manager locations. Collaborative efforts between the wealth and lending divisions of ABFL underscore their holistic approach to client service, ensuring that all financial needs,

from investment to borrowing, are meticulously addressed.

Rajoria’s vision for asset class diversification and product strategy remains focused on delivering independent advice and curating investments that resonate with client goals and market opportunities. “All the research we produce is circulated to relationship managers and directly to clients as well, ensuring transparency and alignment in our wealth services,” he notes. This strategy of open communication and digital engagement positions Rajoria and his team to adeptly manage the wealth of their clients, safeguarding their interests while navigating the complexities of the financial market.

The Financialisation of Savings: A Growing Phenomenon

Historically a nation of savers with a penchant for physical assets like real estate and gold, India is experiencing a significant shift towards financial investments. “The financialisation of investments is a recent phenomenon, starting about 15 years ago, with clients moving their money from real estate into financial instruments,” Rajoria notes. “This trend has accelerated postCOVID, with a staggering 4.2 million equity trading accounts opened in December alone, highlighting the growing allure of financial awareness amongst investors.

Retail participation in financial markets, especially through Mutual Fund Systematic Investment Plans (SIPs), underscores the deepening culture of investment among the masses. “The monthly SIP flow remains strong and has recently hit $2.3 billion, for the first time,” Rajoria points out, highlighting the substantial inflows from retail customers and the expanding wealth pie in India.

Beyond the Major Metros and into T2 and T3 Cities

Infrastructure development and digital connectivity are playing pivotal roles in creating wealth beyond the traditional confines of India’s five biggest metropolitan cities. With the number of airports and highways more than doubling in the last decade and India leading the world in digital payments, tier 2 and tier 3 cities are becoming fertile grounds for wealth generation. “Fifty per cent of startups are being set up in these cities, indicating the incredible wealth creation happening outside the traditional centres,” Rajoria highlights.

Unicorns – Fostering Growth

The startup ecosystem in India is another testament to the country’s wealth-generation capabilities. With over 100 unicorns, startups are contributing significantly to the broad-based journey of wealth creation. This vibrancy in

« ‘‘We remain a plain vanilla wealth outfit, focusing solely on what’s in the best interest of our clients.’’ »

the startup scene is indicative of the vast opportunities for wealth professionals to cater to a new generation of wealth creators.

India’s economy is very clearly on an upward trajectory, with per capita income expected to more than double in the next five years. “We are in a phase where the economy is growing, markets are expanding, and the number of individuals qualifying as HNI and ultra HNI is increasing,” Rajoria concludes. “This growth translates into an incredible demand for wealth management services, setting the stage for a dynamic and robust wealth management sector in India. We are ideally positioned with our reach, open architecture, financial power, segmentation and our overall strategy.”

The Culture and Character

“We remain an uncomplicated wealth management firm, focusing solely on what’s in the best interest of our clients,” says Rajoria, bringing the discussion towards a close. “We do not manufacture any product; we only look at advicing clients, what is in their best interest, emphasising our dedication to objective and unbiased financial guidance, and underscoring the firm’s unwavering commitment to prioritizing client interests over product sales.”

He says their approach to client engagement is not just about transactions; it’s about building relationships based on trust and transparency, thus ensuring that the integrity in our client service is never compromised.

Charting the Course

With these perspectives to guide the culture and character of the firm, and having articulated their strategic priorities, Aman Rajoria is steering the firm he leads towards a future marked by significant growth, expanded presence, and innovative client solutions.

“Our objectives are clear, and our plans are in place,” he states. “In the competitive landscape of India’s wealth management sector, we believe we represent a compelling combination of strategic foresight, innovative digital approaches, and a steadfast commitment to client-centric service. We are on a path to not just meet but exceed our ambitious targets, and we are setting ourselves a high target for success in India’s remarkably dynamic and expansive market.”

« ‘‘The financialisation of investments is a recent phenomenon, starting about 15 years ago, with clients moving their money from real estate into financial instruments. This trend has accelerated post-COVID, with a staggering 4.2 million equity trading accounts opened in December alone, highlighting the growing allure of financial awareness amongst investors.” »

Charting the Future: The Drive for Global Expansion and Client Excellence at Indian Wealth Firm Waterfield Advisors

Since its inception in 2011, Waterfield Advisors has carved a significant niche within the relatively youthful Indian independent wealth management sector, achieving remarkable growth that now sees it managing an impressive AUM of more than USD5.25 Billion across its network of 7 offices strategically located in India’s leading urban centres. The firm has built a robust team of 120 including 31 RMs and advisors, and counts over 200 HNW and UHNW families as clients, mostly from India, but which include a number of international clients as well. Hubbis enjoyed a recent discussion with the articulate Divij Chopra, a key figure who, in April 2023, quickly ascended to Managing Director of Global Client Origination only about six months after joining as an ED. In 2024, Divij has also assumed responsibility for the UHNW and single family office segment of Waterfield. Working closely in strategy and implementation with top-level colleagues at the company, Chopra believes Waterfield is poised to advance its standing as a leading Multi-Family Office and independent wealth advisory catering to the complex needs of India’s increasingly global uber-wealthy clients, including single-family offices, all seeking the bespoke and holistic wealth and advisory services Waterfield provides, and how they connect with the numerous wealthy Non-Resident Indians seeking to share in India’s buoyant investment markets. His observations and insights reveal an increasingly sophisticated matrix of client expectations and requirements that he believes Waterfield is uniquely positioned to fulfil.

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commissions for the distributor rather than focusing on what’s best for the client. This is where Waterfield’s model stands out; we derive our fees directly from clients, ensuring our advice is aligned with the interest of the client,” Chopra explains. “This approach not only reinforces the firm’s independence but also empowers us to advocate for a client-centric aligned portfolio, especially in selecting investment opportunities.”

often reveals inefficiencies and redundancies in client portfolios. “We highlight red flags, such as overlap between funds which clients might not be aware of, performance leakages, fund leakages, etc. to offer a clearer picture of their investment landscape,” says Chopra. “This process not only educates clients on their current financial standing but also sets the stage for more informed investment decisions.”

In the dynamic and rapidly evolving Indian wealth management ecosystem, the quest for genuinely independent and client-centric advice is urgent and critical. Chopra, armed with many years of experience at home and in major overseas wealth markets, elucidates the unique value proposition that he thinks sets Waterfield apart in an industry that he says is too often hampered by a lack of true client-centricity and potential conflicts of interest as the sale of products outweighs dispassionate, unbiased advice.

Clients first

“Most clients are sold products designed to yield higher

Waterfield avoids the distribution business model prevalent across the Indian wealth management landscape, a strategic positioning that Chopra maintains is a testament to its commitment to transparency and optimising client outcomes. “We operate based on open architecture, focusing on identifying the best managers and products for specific areas of expertise rather than pushing our own,” Chopra adds, highlighting a practice that starkly contrasts with many in the industry.

Diagnosis then action

The firm’s methodology in engaging with new clients involves a meticulous initial portfolio diagnostic, offering a sophisticated evaluation that

On Waterfield Advisors’ Unique Value Proposition:

Chopra shares a compelling example where Waterfield significantly reduced a client’s expense ratio from over 1.9% to a mere 60 basis points,. “This exemplifies our commitment to not just enhancing returns but also ensuring a simplified, highconviction portfolio that’s easier to monitor, cheaper to assemble, and constructed with a client-centric top-down approach,” he remarks.

The MFO offering

For immensely affluent individuals teetering on the edge of requiring a family office but daunted by the complexity and cost, Waterfield offers a compelling solution. “We represent a sweet spot for clients who can outsource the family office function to us at a competitive cost, ensuring they receive comprehensive operational

« Chopra: ‘‘At Waterfield Advisors, we pride ourselves on delivering truly independent advice, a rarity in a landscape often dotted with conflicts of interest. Our singular focus on transparency and earning fees directly from clients ensures our recommendations are free from the influence of external commissions, setting us apart in the Indian wealth management space.’’ »

DIVIJ CHOPRA Waterfield Advisors

On Comprehensive Client Engagement:

« Chopra: ‘‘Beginning every client relationship with an exhaustive portfolio diagnostic allows us to uncover hidden inefficiencies and provide actionable insights. This meticulous evaluation forms the cornerstone of our advisory process, ensuring that we can optimise costs and streamline portfolios in a way that truly serves our clients’ best interests.’’ »

and investment support from a fully professional team without all the attendant challenges.,” Chopra asserts. “Really, it is far more effective for these types of families.”

Redefining the proposition

Through Chopra’s lens, it is evident that Waterfield Advisors is not just participating in the wealth management industry; it’s actively seeking to redefine it. By prioritising transparency, client centricity, and alignment, Chopra believes Waterfield is a genuine leader for clients seeking independent financial and broader, holistic advice.

Chopra explains that their expertise also focuses on key administrative requirements amongst clients; at the core of Waterfield Advisors’ service offering is a deep understanding of the local client’s requirement to build out a robust investment framework to provide consolidated reporting, risk management, analytics and cost optimisation of their portfolios. Moreover, the clients increasingly seek more long-term advice on estate & legacy

planning based on Waterfield’s close appreciation of those clients’ personal and family situations.

Seeing the big picture

Chopra elucidates: “The biggest problem majority of the wealthy domestic clients face is the lack of oversight on their entire portfolio in a consolidated manner. We step in to provide this holistic view, thereby enabling more informed decisionmaking. This approach not only simplifies the wealth management process but also paves the way for us to address more nuanced needs such as succession planning, philanthropy, and the crafting of family constitutions to manage multi-generational, multijurisdictional wealth.”

And he points to the firm’s international clients, particularly NRIs, where the challenge today is navigating the Indian investment landscape, as so much of that money is flowing back onshore to catch the bull markets at home.

Access to the best

“We leverage our expertise to provide them access to top Indian managers and the burgeoning

alternate investment scene, simplifying their entry into one of the world’s most dynamic economies,” says Chopra. “This strategic guidance is crucial for global investors looking to capitalise on India’s growth story without getting entangled in the complexities of the market, especially as these clients live and work offshore.”

He adds that for any international clients eyeing India’s dynamic markets, Waterfield now facilitates entry through a GIFT City-based vehicle, optimising foreign investment into the mainstream and also alternative strategies.

A GIFT in the making

“We’re also exploring the establishment of a second GIFT City fund management entity to streamline foreign capital into India, reflecting our proactive stance in attracting global investors,” Chopra adds. “This initiative, coupled with plans to expand Waterfield Advisors’ physical presence offshore, underscores the firm’s strategic vision to bridge India’s investment opportunities with a global audience.”

Know your clients

Segmentation emerges as a critical strategy in Waterfield Advisors’ approach to client engagement. Chopra shares: “We’ve segmented our clients into professionals, high net worth individuals, and ultrahigh net worth and single-family offices, tailoring our services to meet the specific needs of each group.” This segmentation allows Waterfield Advisors to deploy specialised teams and solutions that resonate with the distinct requirements of each client segment, from entrepreneurs and banking executives to the most affluent business families.

Amidst this tailored approach, the ‘Heritage’ segment stands out, offering bespoke services to women clients with an emphasis on knowledge development and networking. “Heritage is our unique proposition to empower

our lady clients, helping them become more familiar with their portfolios and the wider investment world,” Chopra highlights, showcasing Waterfield’s commitment to inclusivity and client empowerment.

Big ticket clientele

Chopra reports that the client funds they manage are very significant on a per client basis. The average investment relationship across Waterfield’s 200+ clients is the equivalent of over USD22 million each. “Clearly, we are operating in a very niche segment, “ he says. “Each client and every investment relationship typically comes with a dedicated RM, portfolio analyst, a service RM, and dedicated investment specialist (from the CIO team), meaning we offer a fully professional team dedicated to the client throughout their engagement.”

The vast opportunity in India, with its burgeoning wealth across tier two and tier three cities, presents a combination of challenges and opportunities for wealth management firms. Chopra reflects: “The growth in family offices and the increasing wealth in smaller cities underscore the enormous potential waiting to be tapped. Our strategy to extend our reach deep into all this wealth spread across the nation involves partnering with local experts strategically across the country, thereby ensuring that the firm’s unparalleled advisory services are accessible to a wider audience.”

Leveraging resources and partnerships

Addressing the challenge of scaling in such a diverse and expansive market, Chopra points to talent acquisition and development as key priorities. “We are constantly

On the Challenge of Offering True Independence of Thought:

« Chopra: ‘‘Navigating the Indian wealth management industry, where the distribution model reigns supreme, presents its challenges. We often find clients coming to us with portfolios which have been constructed based on liquidity available at the time of deployment rather than having a framework and target allocation in place. As a result, we find ourselves helping clients to unlearn from their previous investment and deployment strategies and work closely with them to develop curated portfolio frameworks and guardrails based on their objectives, liquidity, risk appetite etc..’’ »

on the lookout for good talent, tapping top Indian business schools and developing a robust internship programme to nurture the next generation of wealth advisors,” he asserts. “This focus on building a knowledgeable and skilled team is crucial to deliver to the increasingly sophisticated needs of our clientele.”

Alternatives move

mainstream Chopra also highlights the firm’s expertise in the expanding realm of alternative investments. For example, there has been a very rapid escalation of interest among domestic and global investors in India’s startup ecosystem. With a staggering growth rate of 46% annually in fund allocation from family offices to startups between 2019 and 2022, India’s alternative investment sector is witnessing unprecedented momentum.

“Two-thirds of the 300 family offices in India are already making significant strides into the startup ecosystem, favouring seed-stage investments in sectors like FinTech and e-commerce,” Chopra reveals,

highlighting the voracious appetite for innovation and growth among India’s affluent families.

The surge in allocations towards alternative investments, projected to reach as much as 35% of overall portfolios in some cases, underscores the critical need for expertise and access in navigating this vibrant landscape. In response, Waterfield is launching its second fund of funds, aiming for the equivalent of USD250 million to grant clients access to premier managers, including newcomers to the Indian family office sphere.

“This venture is particularly exciting as it offers our clients opportunities to engage with managers previously inaccessible to them,” Chopra notes, emphasising the firm’s commitment to broadening investor horizons.

Working with the experts

Beyond the allure of alternative investments, Chopra touches on the comprehensive suite of strategic solutions Waterfield Advisors offers, partnering with global experts to extend

a wide array of services from immigration solutions to bespoke fund management and property financing. “Our collaborations are pivotal, allowing us to present a holistic value proposition that resonates with both our domestic and international clientele,” he explains. “This approach is emblematic of our ethos of providing tailored solutions that cater to the nuanced needs of affluent families and investors.”

Segmentation

A pivotal aspect of the strategic roadmap is the implementation of a sophisticated client segmentation exercise. This initiative is designed to tailor services more precisely to the unique needs of each client segment, ensuring that wealth management solutions are both bespoke and impactful. Integral to this endeavour is the strategic recruitment of subject matter experts across various verticals. By adding to its team of specialists, Waterfield aims to enhance its advisory capacity, offering nuanced insights and expertise that align closely with the specific financial goals and challenges of its clientele.

On Tailoring Services Through Client Segmentation:

« Chopra: ‘‘Our strategic segmentation of clients into bespoke categories enables us to tailor our advisory services with unparalleled precision. By understanding the unique needs and aspirations of each segment, from high-net-worth individuals to ultra-high-networth families, we ensure that our solutions are not just effective but also deeply resonant with our clients’ financial journeys.’’ »

The international offering

Recognising the growing demand among clients for assistance with managing offshore private banking wealth, Waterfield Advisors is set to expand its global investment advisory services. This expansion is not just about scaling operations but also about enriching the firm’s infrastructure to support this growth effectively. Chopra cites the recent winning of two significant client mandates in this area as a testament to the trust clients place in Waterfield’s capabilities. “We are also well poised to manage global assets, and families are increasingly looking for alignment in that space as well.”

Nurturing talent

In an industry where attrition rates are high, Waterfield Advisors places a premium on nurturing its workforce. The firm is deeply invested in developing internal talent through comprehensive programs that encourage both lateral and upward career progression. This focus on empowering employees reflects

Key Priorities: Waterfield’s Blueprint for the Future

At the heart of Waterfield’s strategy for the next two years lies a comprehensive plan aimed at refining client engagement, enhancing global investment advisory capabilities, and bolstering internal talent development. This approach underscores the firm’s commitment to not just maintaining its status as an emerging leader in wealth management but also setting new industry benchmarks for excellence and innovation.

Waterfield’s belief that a motivated, skilled, and satisfied team is central to delivering exceptional service to clients. By fostering an environment where talent thrives, Waterfield not only enhances its service delivery but also solidifies its reputation as an employer of choice in the wealth management sector.

Oiling the wheels of expansion and growth

Chopra’s articulation of the Waterfield proposition, both for today and in the foreseeable

future, is replete with both strategic insights and a very evident passion for his role. Waterfield appears to be ‘on a roll’, winning new clients, serving all clients more holistically, expanding its AUM, and driving towards innovation and internationalisation. As the firm continues to navigate the complexities of wealth management with a keen eye on future trends and opportunities, Chopra believes that the firm is plotting the right coordinates for further growth and yet more success.

On the Importance of Internal Talent Development:

« Chopra: ‘‘At Waterfield Advisors, we believe that nurturing our internal talent is key to sustaining our growth and maintaining the high quality of service our clients expect. By investing in the development of our team, we not only enhance our advisory capabilities but also foster a culture of excellence that benefits both our clients and our firm in the long term.’’ »

Getting Personal with Divij Chopra

In an industry where global exposure and localised knowledge are often two core pillars of success, Chopra’s story is of interest as a seasoned wealth manager who has traversed the globe, gathering a diverse array of experiences that he is putting to good use at Waterfield Advisors today.

Born in Mumbai and educated in a variety of local and international institutions, he has worked in the financial hubs of Luxembourg, Geneva, and Singapore, and is now back home enjoying the dramatic and dynamic growth there. Having spent 26 years living outside of India, including significant stints in Hong Kong, Singapore, and various European cities, he has developed a nuanced understanding of the global financial landscape.

Educationally, his journey is marked by notable achievements, including completing his A levels in Hong Kong, pursuing undergraduate studies at Richmond College in the UK, and earning an MBA from IE Business School in Madrid.

Further solidifying his expertise, he obtained certification as a private banker in Luxembourg and advanced his knowledge with a wealth management degree in India. This eclectic educational background has equipped him with the tools to navigate the complexities of global finance with ease.

Reflecting on his career, he fondly recalls the foundational years spent in Europe, particularly Switzerland, where he learned much about the traditional ethos of private banking. Yet, it was in Singapore where he encountered a dynamic shift, adapting to the more transaction-heavy preferences of Asian clients. This experience allowed him to marry the holistic European approach to wealth management with the more active, risk-taking strategies prevalent in Asia, crafting a unique value proposition that he believes stands out in the competitive landscape of wealth management.

The decision to return to India in December 2021 after many years of success overseas was partly spurred by a pandemic-induced introspection on family and a bullish outlook on India’s market potential. He says it was a great decision, marking a new chapter in his life. Joining Waterfield Advisors, he embarked on an entrepreneurial venture that leverages his global expertise to serve India’s ultra-high-net-worth individuals, bridging the gap between international financial strategies and the unique needs of the Indian market.

Married for two decades to a partner he met during his college years in London, his personal life is as enriching as his professional journey. Together, they have navigated the world, embracing the myriad cultures and experiences that global living offers, all while raising two sons who share in the family’s adventurous spirit.

In his leisure time, Chopra finds solace and excitement in the world of sports, enduring the highs and lows of being a fervent supporter of the Indian cricket team and Manchester United. Golf is a valued escape, and he cites his most memorable round to be at San Francisco’s fabulous Olympic Club. Yet, it is his love for travel, especially exploring the vast and vibrant landscape of India, that truly captures the essence of his spirit.

Building Dedicated Offshore Platforms in Dubai and Singapore for India’s HNI, UHNI and NRI Communities

Alok Saigal, President and Head of Nuvama Private, is never short of words when it comes to opining on the evolution of the Indian wealth management market, in which he has a genuine passion and fascination. Nuvama Private, the Private Banking Arm of Nuvama Wealth Management Limited, also known as Nuvama Group (formerly known as Edelweiss Securities Limited) emerged from re-branding in its current avatar in late 2022. In 2020, Pacific Alliance Group (PAG) acquired a 51% stake in Edelweiss Securities Limited for USD ~300 mn. Nuvama (NSE, BSE: NUVAMA) is now a publicly listed firm. Hubbis met with Alok in Mumbai in January to learn about Nuvama Private’s plans to build full-fledged independent wealth businesses in Dubai and Singapore. The new operations, which will be properly licensed and staffed, will service the firm’s Indian HNW and UHNW clients diversifying offshore, including the increasing number seeking to establish overseas family offices. The Dubai and Singapore platforms will also reach out to the numerous NRIs seeking specialist guidance and expertise to help them expand their onshore India investments amidst the country’s ongoing bull market.

GET IN TOUCH View Alok Saigal’s LinkedIn Profile Find out more about Nuvama Private

Nuvama Group has enjoyed remarkable growth and manages client assets of USD ~40bn as of Q3FY24*. Nuvama Private is positioned as one of the largest non-bank wealth platforms in India and caters to diverse clientele encompassing New Age Entrepreneurs, Business Owners, Family Offices, CXOs and Corporate Treasuries.

The firm’s comprehensive suite of services includes Investment Management across Capital Markets, Real Estate, Commodities, Currencies and Alternatives; alongside offerings in Family Governance and Wealth

Structuring, Asset Protection and Asset Transfer Strategies, Risk Management, Investment Banking, Financing, and Insurance Advisory.

The call of Dubai and Singapore

Alok directs the conversation towards the firm’s overseas aspirations, disclosing plans to establish operations in Singapore and Dubai. “HNI’s in India are embracing global perspectives and seek support beyond Indian borders,” he remarks. “They are inclined towards currency diversification, given the substantial portion of their wealth tied to India and the Rupee. Moreover, these clients are increasingly sophisticated, yearning for diversified assets and markets.”

He underscores lifestyle diversification and enhanced educational opportunities for their children as additional incentives, highlighting both Dubai and Singapore as prime destinations. Proximity to India and cultural affinity make Dubai a natural choice, while Singapore’s strategic location and sizable Indian population make it equally appealing.

At home overseas

“The clients based in Singapore and Dubai find comfort in the locations and hence attract a lot of capital and interest from India,” Alok notes. “A lot of Indian businesses have created wealth outside of India through the extensive offshore business interests and income. Dubai’s proximity to India coupled with its access to markets of North Africa and Europe, makes it a natural extension for them to set up business operations in the city, leading to growing demand for specialised, India-centric wealth management services with a proven track record.

Addressing real needs

Alok stresses the importance of addressing unmet needs within the Indian diaspora “Our focus lies on offering specialized services tailored to Indian clients, markets, and relevant investment opportunities”.

The second key driver is the Non-Resident Indian (NRI) market to draw their money back to Indian investments.

“With India’s robust economic growth, there is burgeoning interest among Non-Resident

« “HNI’s in India are embracing global perspectives and seek support beyond Indian borders. They are inclined towards currency diversification, given the substantial portion of their wealth tied to India and the Rupee. Moreover, these clients are increasingly sophisticated, yearning for diversified assets and markets.” »

ALOK SAIGAL Nuvama Private

Indians (NRIs) in re-investing in India, and hence we need to establish operations in those offshore markets to deliver conduits for these investments and specialist advice.”

Partnerships in excellence

Alok added “Planned custody solutions is another service relevant to Nuvama’s expansion, as the firm is set to be a licensed External Asset manager (EAM) in both jurisdictions. In Singapore we also hold the capital markets (CMS) license, allowing us to provide full-fledged wealth management services. We are also looking to establish formal tie-ups with banks and other institutions for both products and custody including our preferred partners from India.”

Controlled delivery

Alok emphasizes Nuvama’s intent to maintain full control over client outcomes, a strategy underpinned by deep client engagement and trust cultivated within India. “We aim to replicate this level of personalized service offshore. We know and understand the needs and aspirations of an Indian client, their style and preferences, and

how they like to be engaged with,” he says. “We have learned through experience that they want us to be involved directly, at a level of trust and engagement similar to that established in India.” He explains, “We have developed close relationships with our clients in India, focusing not only on selling products but on providing advisory services and long-term asset allocation and planning. We want to replicate that for them offshore.”

Two-way flows

Alok is confident that this route is the best way forward. “We are providing full-service operations in those markets for our Indian clients, and at the same time, Nuvama’s Dubai and Singapore operations and our bankers will be reaching out to the wealthy NRI communities in those markets. It is an excellent scenario with two-way flows leveraging our skills and expertise.”

He explains that Indian families with wealth often have established business structures outside India and require professional advisory, investment and structuring services to help manage the offshore wealth that they are constantly generating.

Indian SFOs offshore

Additionally, there are many Indian clients seeking to establish bridgeheads offshore, especially in the form of SingleFamily Offices (SFOs). He cites the example of a large business family from Mumbai, with one brother having decided to move to Dubai, where they already have significant assets of around USD100 million, separate from their estimated USD400 million of wealth in India.

Trust and history

The primary requirement of wealthy Indian families is assistance in long-term legacy planning, including succession and estate planning, and setting up a comprehensive family office, Alok explains. They seek trusted partners like Nuvama with whom they have built long-standing relationships, he adds further.

“Clients prefer partnering with experts that have the ‘local’ expertise and guidance from people they know and trust,” he elucidates. “Nuvama can provide full-fledged family office services tailored to the unique needs of these highnet-worth families and at the same time, help devise a holistic approach to the overall estate and legacy planning and structuring.”

« “Clients prefer partnering with experts that have the ‘local’ expertise and guidance from people they know and trust. Nuvama can provide full-fledged family office services tailored to the unique needs of these high-net-worth families and at the same time, help devise a holistic approach to the overall estate and legacy planning and structuring.” »

Spotting an opportunity

As to building the NRI client base through Dubai and Singapore, Alok has some forthright views. He highlights that the challenge in the space is with some of the big banks that are leaders in the NRI market. For various strategic and other reasons, they have become less dominant in the space.

“Amongst some prominent global and Asian names, we are seeing a period of instability and uncertainty within these banks’ NRI segments, and that to some extent spells opportunities for us to be hired as a specialist in the NRI space, as those bankers seek more stable, dedicated and fully committed firms to work with,” he reports.

Talent for hire

Alok extends his thought process to examine the wider options for hiring Relationship Managers (RMs) and advisors in Dubai and Singapore. He highlights the concerns expressed by senior bankers, who feel that their focus is overly directed towards dealing with administrative and

compliance matters at their banks. In the EAM space, regulatory and compliance burdens are perceived to be lighter – as is the case as the accounts and custody are still vested with the banks.

“The bankers in the independent space can focus more on core business activities, helping raise our appeal for those individuals,” Alok elucidates. “There is a perception that the independent segment offers more scope for product and advisory curation that is truly valuable to their clients, whereas banks are often corralling their RMs towards ‘simple’ products such as leverage, FX, fixed income and deposits. “The lack of room to deliver diverse and innovative product offerings at the banks might also be driving the more dynamic and versatile bankers towards the independents, “he says.

A valuable proposition

Alok added that Nuvama envisions itself as a dedicated provider of relevant expertise and specialized knowledge that offers clients

considerable incremental value in comparison to the current players in markets.

“The Indian market is a favourable investment to most investors and the attention of most NRIs is very much on investing back at home. As subject matter experts, this is a significant opportunity for us to build a platform over the next three to four years to deliver real value.”

Careful navigation

Alok re-iterates Nuvama’s longterm vision, emphasizing on the commitment to build a robust, well-regulated wealth management operations in Dubai and Singapore. rather than relying on basic product and banking partnerships.

“Our understanding of the clients and the reputation and track record we bring are foundational to the success we anticipate in Dubai and Singapore. He hints at broader aspirations to deliver a practice that mirrors the expertise and approaches they have established in India.” he states.

*Please note, a conversion rate (as of Dec 29th, 2023) of 1 USD equal to 83.1164 INR has been used.

Saurabh Rungta: Steering the Avendus Wealth Management Investment Proposition to New Heights in India

In India’s increasingly dynamic wealth management landscape where trust, investment expertise, technological innovation and highly client-centric strategies all intersect, Avendus Wealth Management is redefining the contours of financial advisory and investment services. Saurabh Rungta has been Managing Director & CIO of Avendus Wealth since November 2023, coming from a very prominent role as Senior Managing Partner & CIO of Nuvama Private and having assembled an impressive CV in India’s financial sector since the early 2000s. Hubbis spoke with him recently to learn how he is applying his own vision to complement and accelerate Avendus’ achievements and ambitions, with a keen eye on the evolving needs of the ultra-high-net-worth (UHNW) and high-net-worth (HNW) clients the firm advises in India. Rungta’s insights illuminate the pathway Avendus is carving out in this highly competitive space, from addressing the increasingly sophisticated expectations around investment curation to delivering a client-centric, value - added, digitally enhanced proposition across the vast landscapes of India and beyond. He explains that the Avendus evolution is emblematic of a broader transformation within the Indian financial landscape, as the firm carefully plots its way through emerging market trends, regulatory change, and the ever-expanding horizon of client needs, setting a course towards continued growth and innovation.

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View Saurabh Rungta’s LinkedIn Profile Find out more about Avendus Wealth Management

SAURABH RUNGTA Avendus Wealth Management

Opening the conversation, Saurabh sheds light on his multifaceted role and the rapidly evolving wealth management market in India. His insights into the changing dynamics of client expectations and the evolutions of market trends reveal the complexity of catering to India’s rising ranks of HNW and UHNW clients, an understanding that is so vital for his task in spearheading the investment proposition for the firm and driving sales.

Rungta points out the remarkable rise in numbers of wealthy and ultra-wealthy individuals in India, particularly in Mumbai, which has emerged as the Asian Capital for billionaires. With 92 billionaires it ranks behind New York and London but more importantly ahead of certain regions in China. This demographic shift is also visible lower in the pyramid where, he observes, it is characterised by a transition from necessities to comforts and, subsequently, from comforts to luxuries. The global COVID-19 pandemic has caused people to shift behaviourally from merely concentrating on increasing

Key Priorities

Rungta draws the discussion towards a close by delineating the top three priorities steering Avendus Wealth Management’s evolution, underlining a strategic shift aimed at scaling the heights of the private banking sector in India.

“Transitioning from more of a niche player to becoming a leading wealth manager in India is our paramount goal,” Rungta states. “As I mentioned, we need to significantly expand the team, focusing on advisors and sales personnel, to foster deeper relationships with a growing number of families and, by extension, manage a larger AUM. This expansion is not just about numbers; it’s about enriching our client engagements and extending our reach.”

Knowledge and client-centricity form the core of the Avendus approach, with Rungta underscoring their commitment to maintaining high standards in these areas. “Being knowledgefocused and client-centric is in our DNA. We aim to ensure that our insights and advice are backed by thorough research and understanding, allowing us to address our clients’ needs with precision and care,” he states. “We are entirely dedicated to the trusted advisor model, providing value that resonates directly with clients’ needs and aspirations.”

Embracing further digital transformation represents the third pillar of Avendus’ strategy, with a focus on integrating advanced technologies to enhance the client experience. “Adopting digital and AI technologies are crucial for making our services more accessible and engaging for clients,” Rungta explains. “The digital push aims to streamline the investment process, making it easier for clients to access data, explore investment opportunities, and review their portfolios. It’s all about leveraging technology to not just meet but exceed our clients’ expectations, making every interaction with us seamless and productive.”

wealth and preserving it to also enjoying it.

Optimism reigns supreme

Looking more broadly at India’s demographics and key trends, he does, however, offer a word of caution. He highlights a noticeable dip in the retail household saving rates, now edging towards the lower teens, marking a significant shift in financial behaviour.

Nevertheless, despite these indicators, he remains optimistic about India’s economic prospects, anticipating a sustained period of excitement and growth over the next two decades.

He says that for the wealth management industry, critical issues are client-centricity, innovation and the quest for differentiation. The lack

of patenting and copyright mechanisms within the sector means that novel products and strategies can be quickly replicated by competitors, making it difficult to maintain a unique value proposition. “This rapid duplication of investment products underscores the need for continuous innovation and the ability to stand out in a highly competitive market,” he explains.

Becoming a Leader

Rungta reports that Avendus itself is transitioning from a niche private banking institution to a leader in the private banking space. “This evolution involves broadening our product range, expanding our service offerings to include a wider array of solutions, and catering to the varied preferences and requirements of each client,” he adds. “We approach each client differently. With some clients such as large institutions and family offices, we might present a bouquet of investment opportunities since they prefer to pick and choose their investments. Whereas, with individual clients we offer comprehensive engagements that involve a deeper understanding of their needs, hands-on guidance and a more personalised, tailored approach.”

He believes the firm’s strategic commitment to innovation and diversification of proposition highlights their focus on remaining relevant and preferred in the fast-paced and everchanging world of India’s wealth management landscape. “By embracing a client-centric model and focusing on a broad spectrum of financial solutions, our team is working hard to cement Avendus’ position as a leader in the industry as we navigate the

Avendus Wealth Management: Spearheading Innovation and Excellence in India’s Wealth Management Market

Avendus Wealth Management has established itself as a leading advisory firm for India’s Ultra High Net Worth (UHNW) and High Net Worth (HNW) individuals. As of December 2023, the firm managed assets worth the equivalent of USD5.8 billion, a testament to its presence in the high-growth but highly competitive wealth management sector. Over the past year, Avendus has significantly expanded its client base, adding more than 180 relevant families, serviced by over 50 seasoned client relationship managers across various geographies.

The firm has forged a reputation not only in mainstream assets but also through its strategic focus on Alternates. Approximately USD300 million of the AUM is in that domain, reinforcing its objective to be the go-to house for discerning investors seeking diversified investment avenues.

A testament to its digitally enhanced and innovative approach is the Avendus Wealth App, which has seen a 100% adoption rate across the client base, and that the firm reports has been consistently recognised as the best on offer among leading wealth managers. This digital tool not only enhances the client experience but also contributes significantly to the firm’s increasing recurring revenue.

Avendus’ platform of excellence is built on four key pillars: Product, Technology, Customer Engagement, and Talent. These foundations enable Avendus to provide a multi-asset, full-stack wealth management platform offering best-in-class solutions tailored to the entire customer lifecycle. The firm’s tech architecture focuses on innovative digital interfaces and automation to enhance the client and relationship manager (RM) experience significantly.

Avendus prioritises customer engagement through a client-first approach, aiming to deepen engagement and wallet share with key existing clients while being the first port of call for new liquidity events. Moreover, Avendus is committed to fostering an inclusive environment, continually growing a team of diverse and seasoned professionals dedicated to delivering the best outcomes. This holistic approach underscores Avendus Wealth Management’s dedication to excellence and its role as a trusted advisor and partner in the wealth management sector.

Core Strategies for Future Growth

And Avendus is certainly not resting on its laurels. The firm has some key missions to keep up and even accelerate the pace of growth.

Diversifying Product & Service Offerings

The Avendus Group’s acquisition of SPARK Capital, a leading equity research house in India, marked a strategic enhancement of its product suite. This move enables Avendus Wealth Management to offer bespoke listed equity portfolios and strengthen its equity advisory desk by leveraging SPARK’s research capabilities. Looking at the rising demand for a more comprehensive offshore proposition, Avendus expanded its capabilities in collaboration with Saxo Bank. Additionally, the firm has significantly grown its lending services (doubling the book in 2023) and continues to develop its wider Investment Solutions Offerings, further establishing its position as a preferred wealth management partner.

Talent Expansion & Technological Advances

A key to Avendus’ success is its focus on attracting and nurturing top talent, as evidenced by the 50+ client -facing professionals and the expansion of its team to over 160 today.

Furthermore, the firm’s investment in cutting-edge technology, including Dynamics 365 for CRM, Power BI for analytics, and AI tools for operational efficiency, demonstrates its commitment to staying at the forefront of the wealth management industry.

Keeping up the Momentum

Avendus Wealth Management believes that its strategic initiatives and accomplishments underscore the firm’s leadership in the dynamic wealth management market in India. Through its innovative digital offerings, expanded client base, and robust investment strategies, Avendus continues to aim to redefine the standards of integrity and quality in the industry. With a clear vision for growth and an unwavering commitment to its clients, Avendus Wealth Management appears poised to maintain its trajectory of success and innovation in the years to come.

complexities of the market with agility and foresight.”

The Advisory Proposition

Expanding on the dynamic strategies Avendus Wealth Management employs to cater to their client base, Rungta elaborates further on the company’s multifaceted approach. “A vital interaction with many of our clients revolves around advisory services,” Rungta explains, indicating a tailored approach for clients in the USD10 million net worth range. These individuals, according to

Rungta, seek the expertise and comprehensive services that firms like Avendus provide, due to the impracticality of maintaining their own full-fledged wealth management operations as very large family offices might establish.

Rungta states: “Our advisory services appeal not just to HNWs / UHNWs seeking to manage substantial wealth but also to top Family Offices and quasiinstitutional families of India. This clientele likes to work with Avendus, but often prefers not to put all their eggs in one basket,

opting instead to diversify their wealth management across multiple advisors. But they very evidently appreciate the breadth and quality of our advice, whether it is about financial management like asset allocation, specific investment products, quality fund managers, etc. or about achieving specific business and family objectives like organic/inorganic growth in business, drafting a family charter etc.”

Family Offices

Beyond advisory services, Rungta highlights the comprehensive nature of Avendus Wealth Management’s family office services, which provide a 360-degree wealth management experience. “We’re not just about investments. We’re about holistic wealth management,” he articulates, outlining services that extend from financial investments to business strategies, generational planning, and even addressing legal, tax, and compliance issues. “This allencompassing approach aims to cover all aspects of our clients’ lives and financial well-being, also helping ensure a seamless transition of wealth across generations and addressing their evolving needs,” he comments.

In a forward-looking move, Rungta reports that Avendus is also venturing into product manufacturing, identifying and filling gaps in the market with innovative financial products. “Where we see gaps and opportunities in the market, we are increasingly stepping in to manufacture our own products,” Rungta asserts, “with the intention to offer more choice and to showcase the Avendus commitment to relevance, innovation and our ability to adapt to market exigencies. This initiative is part of a broader strategy to not only provide advisory and family office services but also to offer more unique products that are meticulously designed to meet the specific needs of our clients.”

Making Tailored Products

Rungta emphasises the unique value proposition offered through their self-manufactured products, targeting niche markets within India that lack extensive investment options. “From long-short strategies to private investment opportunities to structured credit solutions, we’re creating in-house products that address gaps in the market, appealing to both domestic and international investors,” he explains.

He closes this portion of the conversation by reiterating Avendus Wealth Management’s holistic and client-centric approach, leveraging advisory services, family office solutions, and innovative product manufacturing to cater to a diverse clientele. “We strive to combine global best practices with deep local expertise, thereby providing unparalleled wealth management services that address the unique challenges and opportunities presented by the Indian market. Through this multifaceted strategy, we believe we are instrumental in setting new standards in the wealth management industry.”

Global Portfolio Diversification

Rungta then takes his wide-angle lens to the evolving intricacies and nuances of Indian wealth management, focusing first on the growing trend among wealthy Indians to diversify their investments globally. “Through the Liberalised Remittance Scheme, or LRS, in the nine months ended December 2023, Indians have sent nearly USD25 billion outside the country, marking an approximate 20% year-on-year increase. While the entire remittance under LRS is not only for investments, but still this trend is solid and growing, show-

« “By embracing a client-centric model and focusing on a broad spectrum of financial solutions, our team is working hard to cement Avendus’ position as a leader in the industry as we navigate the complexities of the market with agility and foresight.’’ »

« ‘‘Today presents a prime opportunity to lock in returns close to double digits in dollar terms on fixed income portfolios... All in all, combined with our very comprehensive domestic investment proposition , we are positioning ourselves as a key player in guiding Indian investors through the complexities of both local and global investment opportunities.” »

casing the deepening interest in global diversification.”

He also highlights the emergence of GIFT City as a pivotal development in facilitating outward investments. GIFT City is aiming to establish itself as a preferred jurisdiction for managing family offices and conducting international investments from India, he notes. “GIFT City is an innovative idea taking shape right before our eyes, offering a wellregulated environment for companies and individuals alike to invest internationally without the cumbersome approval processes otherwise required,” he explains, noting the special provisions that allow for greater flexibility in remitting funds for investment purposes.

Catching up Fast

Rungta concedes that Avendus might have been somewhat behind the curve in the international investment space but maintains that he and the team are addressing this headon, with strategic and proactive steps to capture more of this growing market. “We were previously not active enough in this arena, but we have since established a presence in Singapore, assembling a

dedicated team to cater to the needs of investors looking to diversify internationally,” Rungta reports. “This strategic move is part of our broader initiative to offer portfolio services tailored to the global investment aspirations of our clientele.”

Moreover, Rungta says the money flowing out is not entirely destined for the major markets lead by the US. He is optimistic about the potential of emerging markets, predicting a shift where they might outperform developed markets in the coming years, reminiscent of the 2000-2007 period.

EM Set to Shine

“We are actually taking a bold stance, believing that emerging markets are poised for a resurgence. This belief is guiding our strategy to recommend allocating investments in emerging markets to our clients,” he elaborates.

In addition to equities, Avendus is also focusing on fixed-income opportunities, given the current peak interest rates. “Today presents a prime opportunity to lock in returns close to double digits in dollar terms on fixed income portfolios,” he adds, pointing to their efforts to promote and launch new products designed

to help clients capture these conditions. “All in all, combined with our very comprehensive domestic investment proposition, we are positioning ourselves as a key player in guiding Indian investors through the complexities of both local and global investment opportunities.”

Gateway to India

Rungta also highlights Avendus Wealth Management’s strategic positioning in bridging offshore investments into India, showcasing the firm’s comprehensive capabilities to attract and facilitate foreign investment. “With our roots deeply embedded in investment banking and institutional equities, Avendus has established a strong foothold in connecting international investors with lucrative opportunities within the Indian market,” he reports.

“Our Institutional Equities practice, under the Avendus Spark Institutional Equities brand, alongside our IB practice, combine to play a crucial role in making us a key player for foreign institutions looking to invest in India.”

Opening More Avenues

Reminding us of the expanding product manufacturing thrust at Avendus, Rungta reveals plans for

an upcoming fundraising initiative aimed at bolstering their asset management capabilities, particularly focusing on unlisted and structured credit investment opportunities.

“This year, we anticipate attracting substantial international investment into our asset management arm, leveraging our expertise in both unlisted investments and structured credit,” he states, underlining the global confidence in Avendus’ investment strategies. “In the last quarter alone, we facilitated the sale of nearly USD250 million equivalent from international investors to our domestic clients across multiple securities. This type of activity not only demonstrates our capability to mobilise significant investments but also highlights the potential for reciprocal investment flows.”

Rungta then turns to the ambitious growth plans for Avendus Wealth Management, setting sights on a significant expansion in team size and AUM. “With around USD6 billion now in AUM, our strength lies in our 160+ dedicated relationship managers, advisors and product specialists,” he reports. “But we’re not stopping there. We have a bold vision for the future – our goal is to double, if not more than double our team within the next two to three years.”

Major Ambitions

This strategic expansion aims to propel the firm’s AUM to an impressive target of approximately USD30 billion-plus by the end of the decade. “This growth is not just a number; it’s a testament to our commitment to excellence and client service,” Rungta adds, highlighting the scale of ambition at the firm.

Getting Personal with Saurabh Rungta

Saurabh Rungta’s journey from the historic lanes of Kolkata to the bustling financial hub of Mumbai encapsulates a tale of ambition, commitment, and a relentless pursuit of excellence in the world of HNW and UHNW wealth management. Born in Kolkata, a city steeped in colonial history and cultural heritage, Rungta’s early relocation to Mumbai set the stage for a life and career deeply entrenched in the finance and wealth management sectors that he is so passionate about.

A Chartered Accountant by education, Rungta’s foray into the world of finance started with auditing roles for multinational banks, during which times he began a symbiotic relationship with the world of finance and investments that has thus far spanned roughly a quarter of a century.

His early years at Citibank in India and his subsequent role at ICICI Bank laid a robust foundation in forex treasury and international financial transactions, further solidifying his expertise and reputation in the industry. Rungta humorously remarks on his tenure at these institutions: “If you’re a finance guy in India with over 25 years of experience under your belt, then you have to be an ex-Citibanker, ex-ICICI Banker, or ex-HDFC Banker,” underscoring the pivotal roles these institutions have played in shaping finance professionals in the country.

His decision to shift focus more determinedly towards wealth management in 2010 marked a pivotal moment in Rungta’s career. This move, fuelled by a desire to participate in the rapid evolution of HNW, UHNW and family office wealth in India, led him to significant roles at IIFL (now 360 ONE Wealth), Kotak, and Edelweiss Wealth Management (now Nuvama Wealth). Each position, marked by rises through the ranks, enabled Rungta to leave a mark on these institutions, contributing to their growth and success in the wealth management landscape.

Outside the office, Rungta’s life is filled with the simple joys of family, a passion for cricket (a sport in which his son is beginning to excel), and personal interests that span travelling, reading fiction, and enjoying music. His travels, especially a memorable trip to the snow-clad landscapes of Jammu and Kashmir and an exclusive tiger sighting in Pench, offer a glimpse into his quest for experiences that contrast with the rigour and reality of the financial world and the massive cityscapes of India.

In Rungta’s story, we see a portrait of a man who has navigated the complexities of the finance industry with acumen and foresight, all while maintaining a rich personal life that complements his professional achievements.

The firm’s global footprint is also set to widen, with Rungta mentioning operational dynamics in the UAE and Singapore. “As I explained, Avendus Group currently has offices in Singapore and USA, and for the UAE, we’re leveraging India or Singapore. We are actively planning to expand our clientele in these locations and may also look to establish presence in a few more international jurisdictions in times to come. This strategic move is indicative of Avendus’

commitment to broadening its international reach, enhancing our ability to serve local clients as well as an increasing global clientele.”

Embracing a Dynamic Future

Avendus Wealth Management clearly stands at the cusp of a new and exciting era, marked by ambitious growth plans, strategic expansion, and a deepened commitment to technology and

knowledge. The roadmap laid out by Saurabh Rungta is both imaginative and grounded. “We envisage an incredibly dynamic landscape ahead for wealth management in India, with rising sophistication and expanding flows within India, from India and into our markets,” he reports. “These are exciting times, and we are ready to seize the many opportunities and address key challenges along the way.”

Sanctum Wealth Founder Shiv Gupta Surveys

Key Challenges Ahead Amidst India’s Dynamic Wealth Market Expansion

Hubbis met recently in Mumbai with Shiv Gupta, Founder & Chief Executive Officer of Sanctum Wealth, to learn more about the domestic Indian wealth management market and the key trends, opportunities and challenges. In this portion of the discussion, he focused on talent and business development. Looking at the big picture, he highlighted the numerous opportunities ahead in India, including the market’s stellar growth, while at the same time pointing to increasing compliance complexities, intensifying competition driving costs higher and fees lower, the need for ongoing investment in digital solutions, and the serious challenges in locating and hiring experienced talent. He then zoomed in on the business models and the value of scale to capture the full potential ahead. As usual, Shiv’s insights were sharp and concise, befitting a 25-year veteran of the Indian wealth management scene and someone who is both articulate and not shy of expressing himself.

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SHIV GUPTA Sanctum Wealth

Shiv first remarks on the truly remarkable pace of expansion in India’s wealth market. “The sheer size and the pace of growth have already resulted in shortages in terms of the talent available,” he reports. “And it will get a lot worse a lot faster to the point where there is a massive structural mismatch.”

Mind the gap

He says the result is already being manifested in the manner in which people are poaching frontline talent from each other and, in the process, changing the economics of the industry.

“We are clearly going to need some serious interventions from firms, from the industry, maybe from academia as well, to help develop more talent that can feed this huge and growing mismatch,” he comments. “This must be high up on people’s agenda, as they think out a few years from where we are right now.”

Trouble ahead?

However, he fears that there is a blinkered approach to what he sees rather as an impending crisis. “There is the short-term view of managing for the next year or two, but there is a lack of

medium- to longer-term thinking and planning,” he says. “As I see things, it is an absolute imperative for the industry as a whole. I do actually think we will get there at some point, but what remains to be seen is at what pace we can all address these issues by creating some sort of agenda for developing new relationship management resources.”

He explains that for this discussion, he was restricting his comments to RMs, but he acknowledges that these shortfalls will also affect other product and service areas, such as investment management, estate planning, wealth planning and structuring, in short, everything that forms part of a comprehensive wealth management suite.

He says that Sanctum Wealth has been working hard to strategise on these challenges, including developing internal training journeys for wealth managers to develop their own talent in-house.

Greater digital adoption needed

He expands his comments to a wider-angle perspective, pointing to the need to scale the business

« “Wealth managers have a long way to go in deploying technology to its full extent to improve both the quality of advice and the quality of service, and therefore significant investment is needed, and much greater acceptance and adoption internally. At the same time, without the right investment and a smart approach to digitisation, some players could find themselves left behind.” »

models to capture the dramatic growth potential ahead. He explains that a key impediment to achieving scale is the need for digital solutions that are adopted by teams internally and delivered to clients.

“Technology is an opportunity and a threat,” he explains. “Wealth managers have a long way to go in deploying technology to its full extent to improve both the quality of advice and the quality of service, and therefore significant investment is needed, and much greater acceptance and adoption internally. At the same time, without the right investment and a smart approach to digitisation, some players could find themselves left behind.”

He continues: “I think this is a widespread issue, with the pace of tech adoption by firms and individuals within firms generally far from what is required to achieve the efficiencies and other advances. There are clear advantages to be seized, in terms of internal productivity and efficiency, and of course, also improving the client experience, enhancing the service proposition and so forth.

A two-way street

But he says it is not only the teams internally that often drag their feet. Clients can also be reluctant and often need to be more receptive to change. “It is a two-way street, as they also need to be encouraged by the banks and the wealth firms to see the value of these solutions,” Shiv notes.

He says he still finds it truly astounding that technology adoption is so slow in the wealth industry despite the catalyst of

A Short Note on Shiv Gupta

Shiv Gupta is the Founder and CEO of Sanctum Wealth, which was created through the acquisition of the Royal Bank of Scotland’s Private Banking business in 2016. Over a career spanning almost 25 years, Shiv has held several leadership positions in wealth management across Asia and the Middle East.

Prior to 2016, he was a member of the RBS India Executive Committee and the India business representative on the Coutts International Asia Management Committee. Based in Mumbai, Shiv oversaw all aspects of RBS’ Private Banking business in India, which had close to 100 staff including 29 private bankers located in 4 offices across the country.

Shiv had been a part of the RBS Group for 14 years and was one of the founding members of the Coutts International South Asian business. Prior to that, he was based in Singapore managing the NRI business in Asia Pacific, as well as the Thailand market.

Born in India, Shiv holds a Bachelor’s degree in Economics (Hons) from the Hindu College, Delhi University. He is also a graduate of the Harvard Business School’s General Management Program (GMP).

the pandemic, which opened up new digital connectivity and was a major portal to that first wave of adoption. “Hardly anyone knew how to make a digital presentation at the time, but adoption then was incredibly swift, driven by necessity,” Shiv remarks. “We need to recapture that eager adoption and make the most of the digital solutions available today.”

The value of the hybrid model

He also observes that the pandemic did, at the same time, reinforce the value of human advice and connectivity. Starved of that contact due to lockdowns, people took a long look at what they value in their lives, he explains, and says that is why there is a keen embrace today of

the office again in India, as people want human engagement.

“In the wealth industry, we have settled on the hybrid model as the optimal approach for private clients,” he observes, “and rightly so. We now need to leverage technology further to promote both digital and technologysupported human productivity and capabilities. I believe we could all do a lot more with technology, and wealth management is not doing it to the degree that it should, and this is especially true around scale and scalability.”

Time will tell…

Shiv is wary of predicting exactly how the wealth industry will evolve amidst the hurtle-neck growth. “In a country like India, all these changes are taking place

« ‘‘We now need to leverage technology further to promote both digital and technology-supported human productivity and capabilities. I believe we could all do a lot more with technology, and wealth management is not doing it to the degree that it should, and this is especially true around scale and scalability.” »

at remarkable speed, and in a transformational phase that is so compressed, where the market grows 10 or more times in as many years the implications are quite dramatic, and the changes somewhat amplified.”

What he does say is that aside from urgent investment in technology and the dearth of talent, there is rapidly growing sophistication and greater expectations among the client base, rising compliance complexities, and intensifying competition, all of these conspiring to drive costs higher and fees lower.

“Will this all lead to consolidation?” he ponders. “Possibly later on,

yes, but not right now as there are more new entrants than people exiting the industry. Moreover, wealth management is not an industry with winnertakes-all characteristics even though there are benefits from scale; there is room for plenty of players to operate profitably, and it will remain fragmented for the foreseeable future, I think.”

Strategic positioning and smart models

Differentiation, he says, is needed, and different competitors adopt differing strategies around how they assemble their products and services, the broader client segments or perhaps niches they target, and the way they

approach clients, whether more digital or more personal, or the hybrid approach. “There is not necessarily any one configuration that is naturally superior to the other, as long as you are relevant to your target clients and attuned to their needs.”

He says perhaps the only true point of distinction might be what he calls ‘breadth’. He says if you look at the full-service platforms, they seem to have a natural advantage because they are relevant to more of the clients’ needs and should be able to win more of the client wallet. “If you focus narrowly, there are inevitably gaps that others can fill,” he states.

Sanctum Wealth Founder & CEO on the Value of Wealth Management Driven by Integrity and SelfRegulation

India’s equity markets have enjoyed a remarkable rise since the nadir of April 2020 as the world grappled with the first wave of the pandemic. Today, the overall market capitalisation is more than USD4.3 trillion, and the market shows little sign of running out of steam. With economic growth still rolling on at a very healthy pace, with such rapid private wealth creation, and with an escalating transition of ‘old’ money to the next generations, it is of little surprise that the Indian wealth management industry is in an ebullient mood. Indeed, competitors in the wealth market are enjoying a remarkable ride on this country-wide wave of enthusiasm and optimism. Moreover, at the same time, wealthy Indian clients have also been diversifying more of their portfolios into private investments and alternatives, as well as towards global assets, most of which have also performed well. Shiv Gupta, Founder & Chief Executive Officer of Sanctum Wealth, met with Hubbis recently in Dubai to offer his insights into how his firm is addressing the needs of the different segments of India’s private wealth universe, and what he expects ahead. He offered a vision of wealth management being driven by integrity and market forces, not by regulation, and where trustworthiness, transparency, and high-quality service result in client satisfaction and new business generation.

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Find out more about Sanctum Wealth

SHIV GUPTA

Sanctum Wealth

Sanctum Wealth emerged

as a carve-out of the RBS India private banking business in 2016. Shiv and his partners and colleagues have since then built the firm into one of the leading private wealth management businesses in India. The firm today employs roughly 125 people overseeing assets under advice of more than USD 4 billion across 1,300 HNW and UHNW families. The group also boasts marquee external investors, including Multiples Alternative Asset Management and the Xander Group.

Offering optionality based on solid architecture

Shiv first observes that whatever a client’s investment style, Sanctum must be able to service their requirements, whether that is facilitating more of a DIY

investment approach or more of a Sanctum-led portfolio and product curation. “Active or passive, stock or asset picking, or more through collective strategies, we are fully able to service the different client profiles and preferences,” he reports. “The business architecture offers that agility.”

Additionally, he says the firm is also fully able to maintain enduring relationships with client family members as wealth and control of assets transitions gradually from the founder to the next and younger generations.

Connectivity to the nextgens

“We always have a keen eye on intergenerational wealth transfer, aiming to achieve continuity of the relationship,” he says. “This process does not start when the family

situation changes. It must begin well before the actual transfer from one generation to the next takes place. If the wealth firms position themselves properly, they will be better placed in respect of retaining assets after that transfer occurs.”

He notes that there are certain elements that are consistent through the generations, including using the same building blocks.

Flexibility and agility

“The firm’s architecture can accommodate their different approaches,” he says. “They might have a different style, preferences, allocations, risk inclinations, they might err more towards impact, and they might be more digital in connectivity and engagement. But whatever their approach, they need certain standard offerings, including good advice, robust execution, data and analytics, smooth and accurate reporting, and so forth. And we can handle all of that within the proposition we have built.”

Shiv explains that for the time being, as a firm that in its current guise dates back only to 2016, they have more than enough to focus on in India without looking to expand overseas.

India’s gravitational pull

“The world is now starting to come to India, and our centre of gravity remains firmly here,” he reports.

« “The world is now starting to come to India, and our centre of gravity remains firmly here.” »

“We have these building blocks in place to handle the growing client base and to connect from here to international partners and clients. We’ve invested in product platforms, we’ve invested in people, we’ve added new niches, for example in derivatives, and at this stage, our focus is on deploying all of these more fully. By doing so, we will achieve the growth objectives that we have in mind for this stage of our evolution.”

Sanctum’s scale and capacity

He adds that the firm now has six offices in the country and a team of around 125 people, of which 35 are relationship managers. “We have the scale and capability of expanding the business without needing to add more functional infrastructure,” he says. “We are now trying to leverage that capacity. The one key area we really need to invest in further is the front line, and to help boost the RM and advisor productivity. That is a key priority.”

Room for healthy competition

Shiv reminds us of his view of the wealth market as one in which there is room for plenty of

competition, and in which clients often work with a variety of banks and firms. “This is not an industry in which everyone gravitates to just a few providers,” he states. “It is not a winner-takes-all marketplace. Clients work with wealth managers for three key reasons –trustworthiness, their ideas, and their customer experience. In my view, those are what forms the basis for differentiation.”

Staying true to the fundamentals

He expands on this view, stating that if you can build a reputation for trustworthiness – and he believes Sanctum Wealth had done exactly that – it is worth its weight in gold. “I worked with Coutts for 15 years and saw that in action in many markets. This is central to our culture and proposition.”

On the second point regarding what Shiv calls ‘ideation’, or idea generation, and dynamism, he says that Sanctum has approaching 30-strong in their products and solutions team. “Out of around 125 people in total, that is a large number and underscores our commitment to delivering the right ideas and products with the right diligence and agility.”

Finally, the firm is investing keenly and continuously on elevating the customer experience and quality of service. Technology is central to their delivery on that commitment, he says.

Huge growth but taking nothing for granted

Shiv reports that the result is a business that has grown by 30% annually since they launched as an independent wealth firm. “And last year, we expanded our AUM by more than 75%,” he reports. “This is quite phenomenal, and it was supported, of course, by the outstanding performance of Indian markets. But we also brought in new clients and new AUM. And we take nothing for granted – we regularly ask our clients for their feedback on how we might improve.”

Regulating wealth management

Shiv then turns his attention to regulation. In general, he appreciates the work done by regulators towards investor protection and market development. On the advice versus distribution debate, however, he says he is not a proponent of rulesbased regulations (rather than

« “We have the scale and capability of expanding the business without needing to add more functional infrastructure. We are now trying to leverage that capacity. The one key area we really need to invest in further is the front line, and to help boost the RM and advisor productivity. That is a key priority.” »

principles-based) that interfere with market forces by setting rules on commercial matters like pricing and fees. “The market must be a market and should be allowed to determine the price and method for the delivery of services albeit all relevant information should be disclosed to clients. “We need to take a nuanced approach to fee structuring that aligns most accurately with client preferences and acceptability, and that is relevant to market conditions.”

Sustaining a wellbalanced business

Shiv elaborates further on these comments, noting that if advisors are not allowed to charge for certain advice and services, it can lead to a situation where providers revert to a distribution model, not out of a desire to earn more covertly but because the pure advisory model does not allow them to charge

fees that are necessary to run their platform sustainably.

He also challenges the notion that the only way to ensure ethical behaviour in wealth management is through a fee-based model. “The idea that this engenders an ethical model is somewhat simplistic,” he comments. “Actually, much depends on the underlying culture and value system of the organisation; these play a crucial role in determining how services are provided and transparency. You need to present and uphold an organisational culture that promotes ethical practices and integrity in order to deliver a sustainable wealth management proposition.”

A culture of transparency and integrity

He crystallises these nuances by stating that he does not think that having a model where you charge for transactions and doing

the right thing transparently for your client are mutually exclusive. “I don’t believe that is true,” he states. “I firmly believe you can have a culture and a system in an organisation, a genuine commitment to a certain conduct that ensures this. You can do the right thing for the client, and you get paid for it commensurately. The regulator requires everyone to disclose all fees to clients, so in my view, that should be based on commercial negotiation and agreement with the clients.”

Let market forces determine value

He concludes by saying that whatever his views, he thinks the debate over how fees get charged for advice versus distribution and how it all comes together for clients who want a fee-based model but also access to ideation will take some time to play out and take final shape.

SCALING THE PROPOSITION INDIAN WEALTH MANAGEMENT:

SUMMARY

During the recent Hubbis visit to India where we met with approximately 125 leaders from the asset and wealth management industry, we had the opportunity to speak with senior product and platform managers from across client segments and platforms, covering State and Commercial Banks, International Private Banks, Independent Asset and Wealth Managers and Multi- Offices.

The following summarises a selection of interesting insights received from asset and wealth management firms in India on how they are seeking to scale their platforms and offerings and where some of the challenges and opportunities lie.

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Active vs Passive Management

Historically, active management has dominated the Indian market, in part due to the regulatory environment driving a distribution model (mutual fund portfolios) to mass affluent and high net worth investors, and a reticence to pay transparent fees. Nevertheless, there is a growing requirement for passive solutions, and a steady increase in their adoption is being witnessed. This is being driven in part due to a demand for lower fees, the diversification benefits, and the growing awareness of challenges in outperforming benchmarks.

That being said, with India still very much in a rapidly growing developmental phase, there remain significant opportunities for active asset managers to outperform, notably in the midcap and small-cap space, and to provide alternative investment solutions such as diversified exposure to private markets.

The result of this is that within the advised client segment, typically seen offered to the HNW and UHNW space, there is an evolution of a hybrid approach in the traditional equity and bond segment as investors utilise passive funds for core holdings to benchmark the larger indices whilst blending active managers to focus on the market segments where Alpha can be generated (mid-cap/small-cap).

In addition, in the HNW and UHNW space, as clients seek to diversify further there has been a surging interest in adding Private Equity and Venture Capital to portfolios, and this is increasingly spreading to Private Debt and

Hedge Funds. This has attracted the larger local and international private markets managers to the HNW and UHNW market in India which is benefiting not only from the general growth in the India market but in particular the technology and e-commerce sectors. Furthermore, there is a growing appetite amongst the older promoters to monetise their equity holdings which presents opportunities for both the public and private markets.

Multi-Banking

For the HNW and UHNW segments the perennial challenge of multibanking relationships continues to represent challenges in the account aggregation process. Without API connectivity generally in place, the importance in the Fintech sector of having efficient systems in place to consolidate and aggregate data, and then to provide an efficient portfolio reporting overlay is vital.

The challenge is further increased as the once very private promoter, having his corporate accountant punch some numbers into a spreadsheet, is rapidly being replaced by sophisticated approaches to asset reporting and portfolio management. These HNW and UHNW investors are now expecting their wealth managers to provide aggregation and reporting capabilities and the leading firms are stepping up with this capability.

GIFT City

There is considerable focus and investment being undertaken in GIFT City by both asset and wealth managers. With state-ofthe-art infrastructure evolving, tax incentives, access to global markets

(both out and in) and a separate regulatory framework designed to facilitate international transactions and provide certainty, GIFT City is in turn evolving into a global financial hub for Indians, and an international financial centre in its own right.

Notable feedback from our talks with asset and wealth managers in Mumbai is that the momentum with GIFT City is sufficient now to encourage more relocation of personnel to GIFT City as they see the career upside to such a move, leveraging the first mover opportunity.

Varying opportunities arise, but some which struck were:

1. For feeder funds and fund access generally for both access to India and access for India globally, funds based in GIFT City make more sense now than locations such as Mauritius or Singapore due to the regulatory and tax certainty offered.

2. Foreign Investors and NonResident Indians can invest into Multi-Currency “Offshore” Accounts and Deposits administered out of GIFT City.

3. NRI’s can also access Indian stocks and mutual funds, meeting a strong demand for NRIs to invest back into India.

4. Foreign investors will gain an increasing choice of efficient feeder vehicles to enable investment into India.

5. Resident Indian’s can have the Liberalised Remittance Scheme investment allocations run out of GIFT City, simplifying the investment process and reducing costs for them.

Most importantly, GIFT City provides Indian wealth managers (and asset managers) with a significant opportunity to compete with the international private banks both via their branches in India, but indeed with their branches overseas. With Common Reporting Standards in effect, it provides the opportunity to scale up significantly to attract historic assets which are being managed elsewhere and to capture net new money accessing international diversification.

From a wealth management perspective, my conclusion on GIFT City is that the International Private Banks, looking after NRIs (both inside but in particular outside India), need to have a refocus on their NRI business and ensure they have sufficient focus to meet the competition arising from the domestic Indian wealth managers who are expanding overseas in jurisdictions such as Singapore and Dubai as well as offering the GIFT City solution.

Business Models

During our visit, Hubbis had the opportunity to meet leaders in all segments of the wealth management industry. The overriding impression was that the scale of the cake is so large that there is an opportunity for everyone in the space. The competition is however fierce, and the result is that a failure to focus properly on the opportunity, may lead to some very obvious underperformance by those wealth managers who do not execute well.

The following were key elements of feedback:

1. State and Commercial Banks – the large behemoths have no shortage of potential

customers. Their greatest challenge is training sufficient advisors. To a certain extent this is relatively straightforward with digital based DIY solutions for the retail and mass affluent segments, whilst the distribution model will meet the needs of the higher net worth mass affluent and less sophisticated customers. Nevertheless, they are also engaging the HNW and UHNW advised segments, replicating the strategies in the private sector. To this end they have the challenge of delivering excellence to all the segments, whether it be a DIY digital only model for the retail and mass affluent or scaling up through the distribution and advisory models. The challenge as we echo later is to take an RM from a relatively simple distribution model client base and leverage that RM to be able to advise HNW and UHNW clients.

2. Independent Wealth Managers – these firms have often evolved from asset management firms, the larger State and Commercial bank wealth managers and indeed the international private banks as either management buyouts have occurred, or teams have departed. The overriding impression in India is that the committed firms are evolving to achieve the ability to deal with all the regulatory segments in a fully integrated manner. This has been supported by some Private Equity players who have provide the capital. They have digital platforms for the DIY investor, distribution models for the mutual fund investors, and advisory models for the HNW and UHNW who need

more specialised advice. This approach enables these wealth managers to scale off a broader client base potential, provides a client centric solution to their clients’ needs, and enables a hybrid approach by the client to the offering.

3. Multi-Family Offices (MFO)

» The emergence of the independent fee based MFO with a strong holistic process is rapidly emerging. As already mentioned, as the HNW and UHNW segments seek a more professionalised approach to managing their wealth, a transparent approach is being demanded by more wealthy families.

» This growth story is further reinforced when looking at the numbers. Simply in the UHNW segment there are approximately 1,200 centimillionaires in India with this number set to double in the next 5 years. Yet, there are only approximately 750 advisors in the HNWI and UHNW space.

» The challenge for the larger families is going to be to access the skillsets amongst their advisors that they need. This is further exacerbated by developments such as GIFT City which will enable them to start conducting more of their offshore asset management from India itself, which requires a further enhanced level of sophistication from their wealth manager. Indeed, we are seeing some NRI RMs with banks overseas, returning to India to take up this opportunity and in many cases to access a larger share of wallet of their client.

To this end there has to be a significant growth in demand for MFO’s as the larger families appreciate the cost effectiveness of working off a platform that has economies of scale through working with multiple families, whilst leveraging the limited talent pool. Indeed, there is nothing to stop larger family groups from cooperating together to establish their own platforms, and this will undoubtedly lead to new MFOs being established.

4. International Private Banks (IPBs)

» The comment that resonated from our visit was “lack of focus”. For a number of the IPBs their lack of focus on India has led to significant attrition in their key personnel and a failure to scale their platforms has led to an inability to compete with the growing competition. This is not the case with all IPBs but nevertheless is a significant weakness.

» Often, global management has not taken the time to understand fully how India operates, and they have been distracted by the perceived opportunities in China and the rest of Asia, whilst not paying sufficient attention to the potential jewel that India represents. Time to refocus?

» For those IPB’s who are making the commitment to India the opportunities are good, particularly those with an established foot-print. Whilst they have the advantage of providing global financial market access and potential access to more sophisticated product solutions, the level playing field is being

flattened by levellers such as GIFT City, so they will have to sharpen their game commensurately with the winning pack.

» There are clearly some IPBs who are rising to the game, nevertheless there are some that still do not seem to be able to make a proper commitment – their days are likely numbered as they fail to attract the personnel needed to maintain their platforms.

Talent

Without a doubt, the overriding comment on the one major factor that was impeding growth amongst wealth managers was the ability to attract and retain the best talent. With a rapidly growing industry, the war for talent is on.

The war for talent is exacerbated by the different regulatory segments. Whilst the large State and Commercial Banks can train up advisors to direct their clients to a mutual fund portfolio, this source of talent is restricted in its ability to move up to the HNW and UHNW space. The best invariably will move up to the larger clients, but the challenge is that their product knowledge is limited and success in selling a mutual fund portfolio does not necessarily prepare one to service the holistic needs of a HNW or UHNW client.

A number of notable pointers which came out of the discussions were:

1. There is a preference for Indian personnel to go to local firms rather than the IPBs as explained above.

2. For the wealth managers with retail and mass affluent segments, whilst it makes sense to evolve the top performing

RMs here, the challenge is the training and development of these individuals to advise HNW and UHNW clients. Enhanced learning and development programs need to be developed for this cohort.

3. The importance of leveraging up on skilled Investment Advisors and Product Specialists is even more the case now in India. Building a solid platform here is vital to support RMs who should focus more on the management of relationships. Invariably however there are issues related to client ownership, and of course the good Investment Advisors are seeing the opportunities themselves to move into relationship management should the compensation provide better rewards there.

4. In the boutique/independent firms, there was a much greater emphasis on the need to train and develop internally with a more structured career path being emphasised. Emphasis was placed on promoters and partners in these firms needing to develop their own teams through their own mentoring and leadership capabilities. Certainly, to develop the sophistication needed to service HNW and UHNW families, the importance of the value of learning and development based on a combination of technical learning supported by holistic mentoring could not be understated.

5. The challenges in finding enough talent places even more emphasis on having a comprehensive and capable

technology platform to enable optimisation of resources and client experience through an efficient interface. The upside to mitigating at least in part the talent challenges by implementing effective digital solutions and enhancing Artificial Intelligence and Generative Artificial Intelligence is significant.

Private Markets

Environmental, Social and Governance (ESG) Investing

In the discussion on product segments, it was interesting to get a flavour of demand in India for

ESG related investment products. The most common areas appear to be alcohol and meat related investments driven by religious beliefs, and the overall impression was that the demand was relatively limited.

One investment manager commented that with concerns over performance and potential greenwashing, their firm would offer tailored mandates on demand but otherwise did not pro-actively promote the solution.

Summary

The above represents a snapshot of some of the many interesting topics discussed with the wealth

management community in Mumbai in January this year. More will follow from Hubbis over time. India represents a compelling opportunity for all wealth managers who take a committed approach to this rapidly evolving market.

The winners in India will require a combination of a scalable and effective platform, and the ability to attract, retain and develop effective personnel. This requires targeted investment and medium to long term commitment, a characteristic which is not prevalent to all, but for those that deliver, they will benefit greatly from the opportunities.

We are very much looking forward to discussing similar themes at our upcoming HUBBIS INDIA WEALTH MANAGEMENT FORUM 2024, which takes place on Wednesday 28th August at the St. Regis Mumbai.

The event will explore the unfolding trends within India’s flourishing private wealth sector, highlighting the modernisation of wealth and legacy planning, the trajectory of insurance solutions, and the role of digital innovation in augmenting advisory services.

Join us on August 28th for what will be an insightful, informative, and thought-provoking event.

INDIA: THE CASE FOR THE MULTI-FAMILY OFFICE

INTRODUCTION

As the wealth management industry in India sees very strong growth, a common trait emerges that reflects a familiar issue with UHNW and HNW families elsewhere, whose wealth has been first generation driven, and finds its origins in their operating businesses.

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For this first generation of wealth builders, their focus has been on developing their operating businesses, and as such key advisors have evolved within the business and are normally found in the Chief Financial Officers or other key executives, who are the guardians of the numbers and the defenders of the potentially taxable revenue. These advisors have proven themselves in assisting the promoters in building their wealth and have significant influence over the promoters’ decision making and the management of their broader wealth.

The Genesis of these platforms is therefore fundamentally that of a Single-Family Office (SFO) built around the core family business. This is fine during the wealth building phase that involves the operating business, but as the business spins off liquidity, this liquidity needs to be managed effectively, whilst the growing wealth of the promoter creates other pressing issues such as the question of monetising some (or all) of the wealth, and considerations on how to manage the diversifying asset classes that represent the family wealth, and how to maintain and transfer the wealth to the next generation.

The temptation to try to continue to run things in-house is something that many highly driven, and successful entrepreneurs are intent on doing, but this is typically a mistake, and if managed correctly, significant upside can be achieved by attaching external professionals with supplementary skillsets to support the management of this wealth.

This is where a fee based MultiFamily Office (MFO), with a

transparent approach to business, can add significant value, whilst often the cost is offset by the cost savings achieved. To this end, the following is a brief summary of some of the benefits that can arise for these first generation SFO’s to look at outsourcing some of their work to a professional wealth management firm like a MFO.

Business Model

The key requisite of a MFO, is that the MFO is only remunerated through a transparent fee paid by the client. This ensures that there is no conflict of interest in the relationship, and the MFO is completely aligned with its client and its clients’ objectives. This is probably the most important starting point to the relationship.

Market Intelligence

With a fee model, the client is in effect paying the poacher, how to beat the gamekeeper. The senior executives of MFOs and senior client facing staff are invariably industry professionals who “know how the system works”. They are therefore in a position to provide the client with very valuable and impartial advice on how to engage with financial markets, asset managers and custodians, ensuring that all parties who engage with the client are aware that they are under professional scrutiny from experienced advisors.

Chief Investment Officer

The MFO, provides significant economies of scale in engaging experienced personnel to support the client’s investment process. With a multi-banking approach, there needs to be at least one set of eyes which sees the big picture and ensures that the

entire portfolio base reflects the client’s investment objectives and risk tolerances. This does not necessarily mean that the CIO is actively managing underlying baskets of the portfolio, but it does ensure that there is a professional approach to the Strategic and Tactical Asset Allocation process, the selection and engagement of the underlying asset class managers and the choice of product utilised.

Product Selection

A properly diversified portfolio typically requires a combination of asset classes to meet the client’s objectives. This process, driven by a CIO, is in itself a complex process, nevertheless it becomes even more complex when examining the best way to execute and the correct selection of product to achieve the objectives. There are a myriad of issues to deal with, including product type, liquidity of the product, cost of the product, share classes, spreads, active vs. passive approach, foreign exchange, private markets access including co-investment opportunities and so on.

Furthermore, the promoter may also need investment banking and capital markets services to for example, raise liquidity through either debt or equity offerings and as such an experienced, impartial supporter in this process can often be found in the MFO.

Correct product selection is a vital process in managing the liquid wealth of these clients, and it is a major source of value add that an MFO can provide, enabling the client to have alongside them a professional who understands the opportunities and short comings of product that is available, and

can steer the client to the optimum solution. Indeed, when combining the benefits of both the custody and execution ability with correct product selection, a significant reduction in costs can often be achieved for most clients.

Custody and Execution

MFO’s will typically have relationships with several custodian and execution partners. This can provide significant efficiency and cost savings to the client based on the following:

The MFO will typically engage with the external asset manager desk of the custodian (who might for example be a private bank). This desk is designed to focus on custody and execution (as opposed to for example engaging directly with a relationship manager) and is therefore expected to be offering wholesale or quasiinstitutional pricing and services.

The MFO will have multiple clients utilising their preferred custodians. This means that the custodian will view the client through the lens of the MFO, and as a result the pricing offered will reflect significantly greater assets than just the assets of the one client.

The MFO will be able to negotiate pricing which best reflects the client’s actual investment style and requirements. For example, an active client making multiple trades might best be suited to a higher custody/wrap fee with a low transaction fee, whilst a client who invests passively and makes limited rebalancing trades might be better served

with a low custody fee with a higher transaction fee.

Account Aggregation, Reporting and Analytics

A significant issue for UHNW and HNW families is the accurate monitoring and reporting on their portfolios, particularly as the issue is exacerbated by the characteristic of multi-banking. The MFO plays a very important part in solving this issue, by having the necessary team and software in place, to efficiently collect the data from multiple sources, and present it in a format that enables effective analysis and diagnostics which helps considerably in the asset management, risk management and cost management process.

SUMMARY

Furthermore, utilising tailor-made software provides huge benefits in educating family members as to the investment process, and portfolio construction and management. There is nothing worse than looking at an Excel spreadsheet to try to understand what is going on with a portfolio.

Estate and Succession Planning

With the more transparent and unconflicted nature of the MFO relationship with their clients, combined with a higher degree of holistic oversight, there is a natural tendency for them to be drawn into the question of estate and succession planning solutions for their clients. To this end, some MFO’s will specifically engage inhouse professionals who can guide the client to appropriate

solutions, often engaging external professionals to support them in this process. Others, whilst not having inhouse specialists, will have engaged relationship managers who are experienced in guiding or working with a client’s external advisors who are dealing with these issues, so there is the opportunity for the new client to leverage off this knowledge and skillset.

It is always vital to co-ordinate the estate and succession plan with the managers of the various assets of the family, whether it be the MFO as overseer of the investable assets portfolio management or the chief executive of the family business or indeed trusted CFO. The solution to this might be found in the MFO, and even if not, experienced views and support can be obtained to aid in the client’s decision-making process.

In India, a growing number of traditional first-generation wealthy families are reaching an inflection point when it comes to the management of their wealth. Many are now scaling up and looking for solutions amongst the wealth management landscape to manage their broader wealth and provide a professionalised and holistic platform for the next generation.

For the wealth management industry in India this represents significant opportunities, the challenge however is to provide a holistic, solutions driven platform which is aligned with the client’s interest. This presents significant opportunities to a number of verticals in the wealth management industry who are able to deliver this, but is particularly suited to the Multi-Family Office platform that operates on a transparent fee basis with their clients.

SUMMARY

In partnership with Swiss WealthTech Evooq, Hubbis in January hosted a private and off-the-record event in Mumbai with private banking and independent wealth leaders in India. The mission was to discuss the many challenges they face in evolving their wealth management offerings and analyse the role that technology could, and often perhaps should, play in advancing their propositions. Hubbis has selected and distilled some of their key observations in this review.

Evooq Attendees: Mathieu Cambou, Chief Product Officer; Travis Fum, Sales & Partnership Manager; and Ankit Vashishta, Software Engineer

Wealth Industry Attendees: 12 key decision-makers, including Private Bank CEOs, leaders of Digital Transformation, heads of Product & Research, COOs, CTOs, Technology Consultants, and others.

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THE SNAPSHOT - KEY TAKEAWAYS AT A GLANCE:

There is a rising demand for digital solutions in wealth management across India’s increasingly dynamic wealth management ecosystem, aiming to enhance RM productivity and boost client engagement.

The hybrid and ‘phygital’ world of wealth management is with us - the blend of technology with human interaction remains crucial, maintaining the personal touch that is highly valued in wealth segments, especially amongst the HNIs and UHNIs.

There are adoption challenges amongst the bankers and advisors as well as some of the clients: despite advances, the wealth sector faces hurdles in fully embracing digital processes, often reverting to traditional methods for certain tasks, sometimes by necessity but too often by preferences for old and proven practices.

In general, the end clients expect better and more seamless digital experiences influenced by their interactions with consumer apps, and the delivery of a high-quality digital experience is a key element in any provider’s competitive edge.

Digital-first providers and robo-advisories are emerging, challenging traditional wealth management practices and appealing to tech-savvy clients. While the incumbent banks and other competitors might not go fully digital-first, they are raising their game in the face of this intensifying and diversifying wealth management landscape. Traditional institutions are, therefore, investing heavily to match fintechs’ agility and innovation to meet client expectations.

Onboarding processes and KYC compliance remain complex and challenging, with ongoing efforts to streamline and digitize. Solutions are partly digital, but also frustratingly manual still. Improvements are being made, but there is a recognition in the industry that these first steps imprint in clients’ minds. Getting this all right, or doing it as well as possible, helps the seamless integration of the clients into the institution and greatly improves the transition to clients becoming active investors and loyal customers.

As KYC evolves into an investment offering, banks and other firms are evolving their strategies, including discretionary mandates and fee-based advisory services, all with a growing focus on digital support, and all to help boost the visibility and predictability of revenues.

Effective data aggregation and analysis are vital yet still challenging, and there is an industry-wide effort to refine and accurately utilize client data, make recommendations and information relevant to clients, make it all easy to digest, and deliver it in the ways they prefer. Improved datasets and technological advances have led to better data accuracy, enabling more informed decision-making.

Increasing the number of AI and generative AI use cases results in banks increasingly exploring generative AI for various applications, including fraud detection and loan underwriting, utilizing machine learning and predictive analytics to improve efficiency and accuracy in these critical areas.

Technology, especially AI, is increasingly expected to augment the capabilities of RMs rather than replace them, making them more effective in their roles. AI and ML are there to empower the RMs. As such, the dynamic Indian wealth industry is exploring AI and ML to help empower RMs, improve client service, and boost their delivery of advice, investment insights and even oversight around compliance.

KEY INSIGHTS & OBSERVATIONS IN MORE DETAIL

There is a growing appetite for digital solutions and connectivity amongst India’s wealth management clients across all segments. At the same time, a real thrust to drive RM efficiency, productivity and effectiveness and to free them up to focus more intently on their clients and to help the operation achieve more scale. However, technology adoption, both internally and externally, still needs to improve.

There are now heightened expectations for digital service delivery, influenced by everyday app usage where users, including relationship managers, expect quick and efficient interactions. Moreover, digital and roboadvisories have risen in India, providing intensifying competition amongst the retail and mass affluent investor ranks and certain of the more tech-savvy HNI clients.

The standard for digital services, set by leading digital platforms, demands seamless experiences. Failure to meet these expectations can lead to dissatisfaction among users accustomed to frictionless interactions. While some aspects of digital banking, such as account execution, have advanced rapidly, others, like portfolio allocation and planning, are still evolving. Comparisons with the offerings of FinTechs and robo-platforms are inevitable, even if not entirely fair, due to different regulatory constraints and operational backgrounds.

Legacy institutions face challenges in adapting as quickly as fintechs, but there’s a clear effort to improve and meet the high standards expected by clients and relationship managers.

Combining technology with human interaction in the wealth

business in India is vital, especially as personal touch remains very important across many wealth segments in India. But while technology is essential for scaling and streamlining tasks, there is still a reliance on traditional methods such as physical signatures and in-person assistance.

The more that providers can facilitate a seamless digital experience from onboarding to portfolio management, the better. However, there is a concern regarding adoption as both clients and relationship managers often hesitate to fully embrace digital processes, preferring some aspects of the traditional approach, even though that restricts providers’ ability to scale their offerings.

A speaker noted that the criteria for evaluating RMs had shifted significantly, particularly in the last five to ten years. The focus has increasingly moved towards digital enablement, recognizing that an RM’s effectiveness is optimized within a certain span of control or number of managed relationships. The providers are increasingly not only examining client journeys but also closely analyzing RM journeys, identifying key areas for digital support and intervention to maintain high service levels across all client relationships.

Segmentation is vital to tackle India’s customer base effectively and will determine the cost-effectiveness of the human compared with the digital approach, or the combination approach. Again, adaptability and adoption are all important

Another guest observed how segmentation is also important, with digital solutions making less or more impact on different clients. He said that for those with investable wealth of over USD1 million, the relationship manager plays a crucial role, with digital tools serving mainly as facilitation.

Among the affluent segment, which ranges widely in assets,

he indicated that younger clients (below 35) are more receptive to digital interface, whereas older clients still prefer personal interaction despite efforts to incentivize digital adoption. The challenge of digital adoption also varies by the age and approach of the bankers, with older RMs possibly resistant to digital enablement due to a fear of losing personal connection with clients.

Change management emerges as a crucial aspect, requiring careful planning to address potential resistance. RMs themselves are increasingly inquiring about digital tools and platforms, such as CRM systems, and processes around lead management, indicating a growing openness to digital solutions.

Most RMs are increasingly seeing the value of technology to boost their capabilities, and banks and other providers are increasingly centralising the RM control hub

Expanding on these ideas, another attendee noted how keen RMs and their clients are definitely coming to see the value of simplicity and

efficiency, valuing a digital platform that integrates all necessary tasks into a unified, user-friendly experience. The ideal system minimizes the need for multiple steps or systems, enabling tasks such as onboarding and execution to be completed efficiently within a single workflow. RMs prefer having control over portfolio management and value digital tools more for sales, reporting, analytics, and operational support that enhance client interactions, such as instantly sending reports via an app.

The goal is to offer digital capabilities that genuinely simplify and improve the service experience rather than complicating it with disjointed systems.

These tools must also be versatile enough to cater to a diverse client base, from the mass affluent to ultra-high-net-worth individuals, requiring a balance between simplicity and depth of functionality. The ongoing challenge is to keep up with and proactively anticipate these expectations, ensuring digital enhancements are timely and effective in supporting the dynamic needs of RMs and their clients.

Technology is also helping to evolve, elevate and scale the investment proposition

The discussion mined down into the critical role of digital solutions in enhancing the investment proposition by complementing client activities and preferences. The conversation highlighted the importance of digital platforms

in providing this convenience, underscoring that digital integration is indispensable.

An expert outlined three approaches to client management in India: discretionary mandates, distribution/sales, and fee-based advisory services.

He said that RMs are increasingly recognizing the benefits of shifting their client portfolios towards discretionary and advisory services. This shift not only enhances their ability to acquire new clients by freeing up their time but also aims to provide a stable revenue base that doesn’t reset annually. The trend is towards creating a portfolio that yields recurring revenue, moving away from purely sales-focused strategies.

From a digital perspective, he suggested that there are numerous opportunities for technological interventions to support RMs. These include enhancements in portfolio advice, reporting capabilities, support for the discretionary portfolio management (DPM) team, advisory and distribution teams, content management, and the use of data analytics for personalized client interactions.

The movement toward digital solutions is seen as parallel to the evolution of RMs, aiming to provide the necessary tools and support across the three client management strategies.

It is increasingly valuable to deliver clients information, data and insights that are timely, relevant and easy to digest

A guest then highlighted the importance of data and analytics in enhancing digital solutions beyond just DIY interfaces.

The focus is on providing RMs with comprehensive data to offer the best advice and product options to clients, acknowledging the challenges posed by the vast array of available financial products. The goal is to move beyond traditional communication methods, like email, that can lead to information overload and outdated recommendations.

By streamlining access to up-todate product information and analytics, he said the technology aims to empower RMs with the tools needed for informed decision-making and efficient client service. This approach has garnered support across the board, recognizing it as a win-win for enhancing service delivery and client satisfaction.

Another guest addressed operational challenges in product onboarding and portfolio management, emphasizing the complexity of documentation processes for different products in India. The discussion pointed to the difficulty of collecting accurate

data from Asset Management Companies (AMCs) or product creators, which is crucial for maintaining and tracking client portfolios. Mutual funds are more standardized as to information dissemination, unlike many other investment products.

The key concern is ensuring the availability and accuracy of investment-related data such as drawdowns, Net Asset Values (NAVs), and payouts to enable advisors to provide value through accurate portfolio management. The conversation stressed the need for effective communication and data exchange with AMCs and product teams to support informed investment decisions and client service.

A speaker emphasized the ongoing need for improvement and further enablement of RMs, suggesting that there is significant room for enhancement, particularly in creating a centralized dashboard for better management and oversight. Despite using Salesforce

and encountering challenges, they argued that the journey towards optimal RM enablement is still a work in progress, with constant work needed to fully realize the potential of digital tools and processes in wealth management.

Furthermore, he touched on the development of solutions that align client portfolios with model portfolios, emphasizing the importance of addressing specific client needs and motivations to foster change and deeper engagement. This strategy, which their bank aims to implement this year, is designed to enhance client satisfaction and loyalty by demonstrating the tangible benefits of following the bank’s investment advice.

The wealth industry at large in India is adapting to the challenges from digitalfirst new entrants

A speaker from a major global bank operating in India’s wealth market noted that while the bank does not have a wealth-only digital offering, the rise of fintechs has spurred a competitive edge, prompting the

bank to benchmark their capabilities and connectivity against these new entrants. Despite the challenges posed by regulatory constraints, legacy technology, and a historically conservative approach, fintechs have inspired the bank to adopt a more nimble and innovative stance.

While fintechs pose a significant challenge in the mass affluent and retail customer segments, this particular bank focuses only on HNI clients, where relationship management and service standards are crucial. Nevertheless, if they want to expand their wealth management services to its entire customer base, as they do, they will need to up their digital game. However, to their advantage, they have many more products and services they can plug through their pipeline.

There are still major challenges around onboarding and KYC in India, but improvements are gradually being made

Client onboarding was highlighted as a significant challenge, involving

various client arrangements and compliance requirements. The aim is to create a seamless onboarding experience that is both compliant and efficient, marking the first critical touchpoint for customers. But for many firms, this is not yet being achieved as fast or effectively as they would like.

The guests drilled down further into advances and ongoing challenges in client onboarding and KYC processes. A speaker acknowledges significant progress yet recognized the system is not yet ideal. The focus is on providing a comprehensive onboarding experience that addresses all of a client’s needs from the outset, including banking, credit, and wealth management services. This holistic approach aims to strengthen client engagement from the early stages of the relationship.

Another speaker elaborated on the persistent challenges in the onboarding process, especially regarding regulatory need for numerous levels of form-filling, including from different businesses within any one group. Unlike the streamlined process of

opening a bank account that can simultaneously include a wealth account, clients onboarding with wealth managers may choose to defer opting into brokerage and other services, leading to fragmented onboarding experiences and potential lags in fully activating the client’s full portfolio of services.

A guest then highlighted the complexity of KYC regulations in India, noting that continuous regulatory changes have complicated the process

significantly. With a 100-page master circular on KYC, the regulations have become so detailed that interpretations can vary widely, adding layers of complexity to compliance efforts.

Additionally, the attendees discussed how new data privacy regulations further complicate matters by strictly defining how collected data can be used, limiting the ability to leverage this information for various purposes. This combination of intricate KYC requirements and stringent data privacy rules poses significant challenges for financial institutions in effectively managing onboarding, client information and compliance.

On the other hand, a guest pointed to the regulatory progress towards enabling 100% digital account openings in wealth management, citing the digitalisation of the Power of Attorney (POA) document as a significant advance. However, she also pointed out the challenge of constant regulatory changes and updates to forms, which can disrupt the process and require frequent adjustments by firms. Despite these hurdles, the ability to conduct all aspects of wealth management -

broking, distribution, advisory, PMSdigitally represents a significant leap forward, with the main issue being the need for regulatory consistency and stability with regard to the forms and requirements.

However, there are plenty of practical challenges in digital onboarding, especially for organisations with multiple authorised signatories. The complexity of ensuring that all signatories are tech-savvy and available for e-signing often leads to clients preferring physical forms for efficiency. The dynamic and rapidly evolving nature of KYC requirements further complicates digital onboarding, necessitating frequent updates and potentially redoing the entire process.

Additionally, wealth management onboarding often coincides with transaction initiation, complicating digital efforts when certain investments or products lack digital onboarding capabilities. This blend of digital and physical processes, termed ‘phygital’, reflects a preference among clients for the simplicity

and familiarity of traditional paperwork over navigating digital onboarding complexities.

Onboarding and KYC as vital first steps to curating the right approach to investment portfolios and boosting suitability

Another banker reported that their current onboarding process for a new bank customer can be completed in 15-20 minutes for a basic bank account. However, adding a wealth management account extends the process because it requires establishing a customer profile, understanding the customer’s needs, and deciding on suitable products.

The goal is to integrate this comprehensive assessment into the onboarding process, accepting that a longer duration (up to 30 minutes) is reasonable if it ensures a thorough understanding of the client’s risk profile, investment experience, and preferences.

This approach aims to match the client with a model portfolio, facilitating comparisons between

their current investments and ideal scenarios, thereby simplifying the relationship manager’s task in advising and executing investment strategies.

A guest observed how, for HNI and UHNI clients, a comprehensive wealth view, including all investments, had become a standard expectation among clients. Despite the challenges in consolidating such data, the demand for a unified portfolio view is critical for offering an advanced family office proposition and/or true advisory roles.

They remarked that RMs require this information to effectively serve clients, making system-based solutions essential for scalability and efficiency. Essentially, this capability has become nonnegotiable for RMs and for the clients, especially for clients at the higher end of the wealth spectrum.

However, they explained this remains very challenging in India as data feeds from all the banks are more of a work in progress, including from a regulatory viewpoint, meaning that a lot of manual work needs to be done to consolidate data the clients send through. She said the PDF or the statements or the transactions are taken from the client, scraped and uploaded.

Data might

be the

new ‘oil’ but it challenging to extract, refine and distribute

Another speaker discussed the challenges of data aggregation, particularly in the context of family office services, where collating comprehensive and accurate client data is essential. The process often involves extracting data from PDFs, which can be unreliable and inconsistent, with a quality success

rate of only 70-80%. Additionally, manual reviews of aggregated data is necessary to ensure accuracy, which can lead to delays and the information becoming outdated by the time it is ready for client review.

The logistical challenge of scheduling client meetings for portfolio reviews further complicates timely service delivery. Despite the existence of platforms designed to assist with these tasks, the lack of direct data access remains a significant obstacle to efficiency and effectiveness in wealth management services in India.

Another specialist said they are working hard on intelligent processes and advances to identify the next best actions for an RM and for the customer, and then disseminate those recommendations through different channels. AI is central to elevating this proposition, but the results are far from perfect as yet.

He said their bank is developing a complex decision-making engine that incorporates numerous rules and algorithms to process a vast amount of data. This system represents the bank’s effort to approach AI capabilities without fully committing to generative AI technologies, particularly for chatbots that offer advice or recommendations.

But he said the bank remains somewhat cautious or sceptical about fully automated advisory services, preferring to improve upon existing methodologies rather than pioneering entirely new AI-driven solutions in the advisory and recommendation space, acknowledging the potential risks and uncertainties associated with full adoption of such technologies, largely due to the

lack of control and clear pathways to decisions, which could lead to incorrect advice being given, and to compliance issues.

Not only is the refining of data very tough, but banks and other wealth firms then need to make sure it is delivered seamlessly, accurately and in the ways that clients prefer

On communication with clients, the guests discussed the various channels. For engagement, which includes direct communication via the RMs, emails, notifications, and other more innovative video, chat or call technology delivered via a smart app, all aimed at making life easier and offering more personalisation. A banker explained their bank leverages customer analytics to recommend specific products and information, aiming to generate client interest through tailored suggestions.

Despite these efforts, he admitted that identifying the most effective engagement strategy remains challenging, relying heavily on trial and error and analytics to guide the process. The goal is to influence client decisions positively by aligning recommendations with their observed behaviour and preferences.

The era of chatbots, AI, generative AI, ML and their application to the world of wealth management

While the future might be hybrid, wealth management increasingly involves a more collaborative model where digital advisories empowered by AI and ML work together with the RMs/advisors, enhancing the client service experience through technology-assisted models.

He agreed that there is a strong inclination to ‘phygital’ client engagement but noted a shift towards more digital interaction. He said this transition is driven by the convenience of digital solutions and the growing number of clients adopting technology. He observed that digital platforms offer clients a sense of control over their investment decisions, allowing them to actively participate and manage their investments more directly and effectively.

A speaker explained that they are working on and using a chatbot that is highly interactive and informed by approximately 4500 investment books. This chatbot is designed to engage with clients by answering their questions about financial markets and related topics. If the chatbot encounters a query it cannot answer, it informs the client that their question will be passed on to an RM for direct follow-up.

He said the tool has proven effective for communication, especially in contrast to emails, which often go unread. The chatbot is also used to distribute monthly and annual financial outlooks, keeping the content engaging and informative. This approach not only maintains ongoing communication but also gives clients a sense of

involvement and insight into their wealth management. The chatbot is self-learning, continuously improving its responses based on the queries it receives, demonstrating an innovative use of technology to enhance client service and engagement.

The Final Word - Digital adoption is rising, digital solutions are expanding and improving, regulation is helping accommodate more automation, data mining and analytics are increasingly prominent, and an AIenabled future awaits…

Another perspective came from a speaker who summarised what he sees as the evolution of digital

adoption in the wealth management industry. He summarised these trends as follows:

Technology, especially AI, is increasingly expected to augment the capabilities of RMs rather than replace them, making them more effective in their roles.

The adoption of tools like IBM Watson and BlackRock’s Aladdin demonstrates how banks and wealth management firms are leveraging AI for better data analysis and decision-making. The availability of more powerful computing resources is facilitating the use of sophisticated models such as ChatGPT and Meta’s Llama 2. Meanwhile, improved datasets and technological advances have led to better data accuracy, enabling more informed decision-making.

Finally, the development of generative AI use cases means that banks are exploring generative AI for various applications, including fraud detection and loan underwriting, utilizing machine learning and predictive analytics to improve efficiency and accuracy in these critical areas.

SUMMARY INSIGHTS & OBSERVATIONS FROM MATHIEU CAMBOU, EVOOQ’S CHIEF PRODUCT OFFICER, AND TRAVIS FUM, SALES & PARTNERSHIP MANAGER

Mathieu Cambou is the Chief Product Officer of Wealth Management Technology provider Evooq, a Swiss firm that prides itself on the design, build, and delivery of technology solutions that enable highquality personalised investment services to be offered by banks and other wealth managers to a wide range of investors.

The firm believes that in a ‘good’ wealth management journey, the needs and expectations of clients should be addressed through a simple (yet also sophisticated) wealth journey through relationship managers and advisors who are robustly supported and empowered by the right management strategies and optimal digital solutions and processes.

Mathieu explained that for Evooq, the RM is front and centre of wealth management for HNW and UHNW clients, and that Evooq’s solutions are designed to support advisory services comprehensively, enabling advisors to create personalized investment proposals, advice, and portfolio monitoring efficiently. This personalization takes into account client goals, wishes, and preferences, aiming to increase advisor ef-ficiency and client base for their customers, including private banks and independent asset managers

Mathieu cited a very important and prominent client, a tier 1 Singapore bank, which utilizes Evooq's platform for their Private Banking and Mass Affluent business, thereby enhancing investment proposal generation and portfolio monitoring.

Evooq has been expanding in the APAC region, emphasizing the importance of placing the investment portfolio at the centre of communication. This approach increases client confidence and, at the same time, helps customers elevate from a product-push to an advice-driven and highly personalized strategy, in the process helping sales and fee generation.

Mathieu also highlighted the significance of content quality. By improving this content, making it more contextual and integrating the bank’s CIO advice directly all relevant to the client’s portfolio, Evooq has seen a marked increase in RM adoption and client engagement. The focus on portfolio advice and the enhancement of content quality are, therefore, pivotal in Evooq’s strategy to provide value to both advisors and their clients.

Travis Fum added that he had moved from a wealth advisory role to Evooq, bringing his insights into the tools he valued that streamline processes and enhance RM/advisor productivity. He said he was attracted to Evooq due to the quality and comprehensiveness of Evooq’s solutions, which support the RM journey by integrating various inputs relevant to client discussions into a single platform. This integration allows RMs to easily access the Chief Investment Officer’s (CIO) views, client preferences, and other necessary information, simplifying portfolio pitches and advice to clients.

He highlighted the inefficiency of previous practices, where RMs had to navigate multiple sources of information, significantly extending preparation time for client meetings. In contrast, Evooq’s platform reduces this preparation time, as evidenced by feedback and statistics from their actual clients, which underscore a marked improvement in the efficiency of generating proposals and communicating with clients in their day-to-day interactions.

Mathieu also pointed to improvements needed in the efficiency of content dissemination channels, highlighting the importance of tracking client engagement with the content sent out. He pointed to the value of transitioning from email to integrated customer portals allowing for better monitoring of how clients interact with the content, including their reading and action-taking behaviour.

He said a key strategy involves making content actionable within two clicks, leading to higher engagement and volume on products. This approach not only focuses on sending less (but more impactful) content but also on leveraging analytics to understand and enhance client engagement effectively.

Travis added that Evooq’s firm view is that the RM and advisor will remain central to the broad wealth management offering, with technology enhancing and supporting their efforts, including around the delivery and content of content itself. But, he said that however smart the content, dissemination and delivery, clients would still like to receive a call or meet the RM to discuss the ideas and advice.

Mathieu agreed, adding that the Evooq solution is also a massive time-saver in terms of preparing and generating proposals. This frees the RMs up for more client connectivity and other value-generating activities. He reported that one of their clients had launched an advisory business supported by Evooq’s product at the end of 2021 with several key engagement and delivery targets for their first two years, which they actually reached within approximately seven months because they managed to scale the business rapidly.

For further reading on Evooq, see also this Hubbis article from December 2023:

https://hubbis.com/article/re-imagining-the-wealth-management-journey-how-advisors-play-a-key-role

INDIAN PRIVATE WEALTH MANAGEMENT THE HUNT FOR TALENT

INTRODUCTION

On our recent visit to Mumbai, Hubbis had the opportunity to meet with and listen to some professionals in Human Resources and Talent Development at leading Indian and international banks and private wealth management firms.

It was clear from our discussion that the wealth management industry in India is showing strong growth, presenting the challenge of capitalizing on this opportunity commensurately.

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A major factor is keeping pace with the demand for qualified personnel to advise on the growing numbers of wealthy individuals and the net new asset potential. The following synopsis provides insights into the opportunities, challenges, and potential focus areas for the industry to address these challenges directly.

Background

The Indian Wealth Management sector is growing rapidly. With approximately 1,200 centi-millionaires and 850,000 households with a net worth over USD 1 million, this is set to double in the next 5 years, and clearly, the opportunities are extensive.

In the spirit of “Follow the Money”, evidence of the recognition of these opportunities is very apparent when looking at the activities of the private equity investors. Household names like KKR, Blackstone, Bain Capital, PAG and Multiples have all made investments in leading wealth managers in India such as ASK, Avendus, Sanctum, Edelweiss (Nuvama) and IIFL (360 One).

In looking at the developments since these investments, one sees a common strategy. The search for smaller players to absorb into and scale up these investments, the development of a comprehensive platform addressing the asset base and regulatory requirements for targeting the different client segment verticals and taking some of these brands offshore to locations such as Singapore and Dubai, to cater for the cross-border opportunities of the HNW and UHNW segments.

Furthermore, the growing Indian non-bank financial services players (NBFCs) are posing an existential threat to the traditional sources of cross border advice in India of the international private banks remaining onshore such as HSBC, Standard Chartered, Deutsche Bank, Julius Baer, Barclays and LGT. In addition, as they spread their wings to Singapore and Dubai, they start to become an attractive platform to NRI bankers at the international private banks in Singapore, Dubai and indeed Switzerland, who may feel tempted to move to firms that have a better

focus and understanding of Indian clients, both domestic and NRI.

This risk to the international private banks of losing NRI bankers to the Indian NBFCs is a symptom of the competition for talent that has evolved in India generally. With the growth rates in HNW and UHNW customers, and the enormous growth rate in AUM and potential AUM the problem that all the wealth managers are facing is the hunt for qualified talent.

For the potential talent, the opportunities are very compelling. At a recent roundtable event that Hubbis held in Mumbai, senior Human Resources professionals confirmed the attractions of the wealth management sector –compelling numbers for current and prospective employees.

In a country with a per capita income of approximately USD 2,700 per annum, the numbers are compelling. Entry level relationship managers straight out of a campus would be expected to be starting at around USD 30,000 p.a. with a junior relationship manager earning around

USD 60,000. In the more established HNW firms, average earnings will be in the USD 125,000 p.a. whilst the top performers will be earning between USD 1-1.5 million. Importantly, the feedback indicated that these numbers have roughly doubled in the last 5 years and with current growth rates, have the opportunity to increase significantly over the next 5 years as the projected wealth is set to double again.

Interestingly, a recent study by Credit Suisse showed that whilst private bankers in locations such as Singapore and Switzerland may take approximately 3.5 years to break even, in India with the higher momentum, the break-even is nearer to 2 to 2.5 years.

The challenge for the wealth management firms is bringing on enough talent to meet this growth and opportunity. This is exacerbated by the different regulatory models, a similar problem to other jurisdictions.

For example, the large State and Commercial banks have enormous numbers in the retail and priority type banking level. As we have recently alluded to, State Bank of India has 460 million customers, whilst Bank of Baroda has 153 million customers. Clearly for a large portion of this segment a digital only solution is the right way to scale the business. However, the HNW and UHNW segments need human touch.

The result is that from a regulatory perspective, advisers, from a bottom-up perspective, are generally limited to the distribution model, in other words, the selling of mutual fund portfolios to meet clients’ risk tolerances and

objectives. These advisers need to be trained to understand a limited product range and operate within tightly controlled processes for the engagement and delivery of solutions to their customers. They then represent a latent pool of talent whose ability, if undeveloped further, is limited to a finite product and planning scope.

This creates a challenge in the HNW and UHNW segments for State and Commercial Banks, International Private Banks, and NBFCs, where a more sophisticated relationship manager is required. These relationship managers not only need to understand a broader range of product and delivery verticals, including direct capital markets exposure, structured products, alternatives, private markets and the advisory model, but furthermore to really excel, they must have the capacity in these segments to think internationally and help coordinate their client’s domestic and international exposure.

The management of international exposure from India is becoming increasingly relevant as clients become more sophisticated, understand the effects of the Common Reporting Standards and start seeking the opportunities that are emerging through GIFT City.

In a nutshell, Indian wealth management firms need many more relationships managers and supporting skillsets. They also need management skills to take them to the next level.

Opportunities

With this background in place, our roundtable of HR specialists came out with some interesting issues and areas of focus. The following is a brief snapshot at some of the many focal points which came out of the discussion:

1. Executive Coaching

Firstly, from a top-down perspective, many of the leaders in the space are becoming what might politely be referred to as “long in the tooth”. Furthermore, due to the rapid expansion of the businesses, a number of leaders fell into their roles as a matter of expedience rather than a superb ability to run a wealth management business (for example being a top RM who was moved, sometimes reluctantly, into a management role). The message being that the established banks and wealth managers need to have a close and effective look at their corporate Governance and Succession plans and ensure that they are grooming, training and mentoring their qualified business leaders to run the businesses through the next stage of their development.

2. Campus Programs

These have generally worked well for the larger banks and wealth managers and can be successful in training larger volumes of relationship managers, in particular for the distribution segment (so the mass affluent/ priority banking type customer). The problem with the product of this segment is that they are limited in their scope to mutual fund portfolios, and it becomes much more challenging to train them to deal with more

sophisticated clients and a more diversified and sophisticated product platform. In particular the training of softer skills to support technical skills becomes vital.

3. Wealth Management Association (WMA)

The members of the roundtable felt that the time was ripe to establish a WMA. The opportunities in India are so significant that rather than fighting each other and stealing each other’s RMs, there is a clear case for mutual cooperation in the interests of the industry as a whole, not only between members of the industry, but to ensure co-ordination and representation with the Government to ensure alignment between Government and industry objectives.

4. Professional Qualifications and Continuing Professional Development (CPD)

Entry into the industry requires a limited test and qualifications. For an industry that is growing rapidly, setting a low bar for entry is important to fuel the engine. However, it is important that the quid pro quo for this is that once entered, the talent is nurtured and trained regularly to advance up the scale of knowledge and capability. The only way for the industry and regulator to ensure this, is to establish a framework of expectations for CPD that are a regulatory requirement. This will ensure that the investment and co-ordination is achieved.

5. Support Staff

Whilst there may be a fixation on RMs, it is equally important to address the requirements in the support staff space, in

particular the Investment Advisors (IAs) and Product Specialists that are supporting the RMs. The IAs in particular provide an opportunity to enter personnel into the industry, develop their technical skills and then to monitor the group to identify suitable individuals to progress to becoming RMs.

6. Client Segment Progression

Many banks and wealth management firms are dealing with multiple verticals driven by regulatory requirements. So for example, they will have a DIY model, a Distribution Model and an Advisory Model. Focus needs to be assigned to developing an RM from a distribution limited

SUMMARY

delivery model to advancing to being able to (from a regulatory perspective) move to additional verticals so as to be able to deliver more products and solutions, and progress to focussing on the higher value clients.

7. Mentoring and Teaching

A common feedback from the group was that even with technical training and opportunities represented by new requirements such as CPD, the importance of managers teaching and mentoring their teams must be recognised (and rewarded). Whilst academic skills can be taught on-line or in the classroom, the softer skills require the voice of experience to transfer this knowledge base to

the next generation of managers and RMs.

8. Overseas Talent

Another common theme was the opportunity for NRI RMs and IAs based overseas to either return home (indeed we met one senior RM who had done so) or to move from the international private banks to the Indian wealth managers setting up operations in Dubai and Singapore. The RM we met who had returned home had done so because his domestic based Indian clients with offshore assets had significantly more assets onshore, and more so, assets were being increasingly monetised. These clients wanted the RM back onshore to manage their assets from Mumbai.

There are many more opportunities to consider but these should suffice for now. It can be clear from the above that from a talent management perspective, whilst there are considerable challenges for Indian wealth management firms, there are also considerable opportunities given the growth metrics.

Whilst digital and AI focused development and transformation can certainly help, the HNW and UHNW require a sophisticated and competent human touch. This requires considerable focus on a structured and relevant learning, mentoring and development program.

There are opportunities for the Government to work with the industry and indeed the industry to work together to meet the opportunities ahead. Certainly, there is more upside to this approach than downside. As one wealth manager commented “We have the unusual problem of having too many clients and not enough advisors”, and a concerted energy, investment and effort is required to feed the wealth management machine. The continued success of the wealth management industry will be dependent on a high quality of training and development to ensure good outcomes for both the industry and its clients.

INDIAN ASSET AND WEALTH MANAGEMENT:

SUMMARY

I have just spent a week in India with Michael Stanhope of Hubbis. We had the good fortune to meet with 125 senior executives of some of Hubbis’ clients, all of whom are leading local State and commercial banks, international private banks, independent wealth managers, multi-family offices, asset managers, law firms and fiduciary services providers.

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I CAME AWAY WITH TWO VERY CLEAR CONCLUSIONS:

1. The global asset management community is asleep at the wheel – it is oblivious to the opportunities in India.

2. The local wealth management, investment banking and asset management industry is riding an elephant, that is running fast! The opportunity is to get on and enjoy the ride.

There are tremendous opportunities to be had in India and there needs to be a much greater focus on building the wealth management sector and asset management sector. The opportunities are there for those who move now.

Let me explain.

The Indian Story

The market capitalisation of the Indian stock market at the end of 2023 was USD4.33 trillion, making it the fifth largest stock market in the world by capitalisation after the US, China, Japan and Euronext.

India is projected to be the world’s third largest economy by 2030. Its current 3% share of global GDP is set to double in the next two decades.

There are between 1100 and 1200 families in India with a wealth in excess of USD100 million, making

it the 3rd largest country of centimillionaires after the US and China.

There are over 800,000 people in India with a net worth of over USD1 million.

However, the punchline is even more impressive – the Indian economy is growing, and the bullish estimates are that the above numbers are going to double within the next 5 years –2,200 centi-millionaires… 1.6 million people with a net worth of more than USD1 million…?

Despite these impressive numbers, global investor exposure and attention to India is pitiful. The country with the fifth largest stock market in the world and a projected growth rate of 6% p.a. represents just 1.6% of the MSCI All Countries World Index, it is not even in the MSCI World Index and has a paltry 9.88%exposure in the MSCI Emerging Markets Index. Furthermore, the opportunities to manage this vast and growing wealth are still untapped and represent significant opportunities for global and local players.

What is clear from our visit is that things are changing, and the early movers have significant opportunities to benefit from what is a long-term secular opportunity. There is a rapidly growing momentum which presents tremendous opportunities for those players who recognise the opportunity and develop the correct strategies. The following is designed to provide a very high-level flavour of what we observed in the key

asset and wealth management segments. It should be clear that there are tremendous opportunities in all wealth segments, and as we will see, for asset managers, there are growing opportunities to benefit from a more liquid capital account.

The Wealth Management Industry Opportunity

India is a country where client segmentation is critical. The per capita income of approximately USD2,000 per annum, in a population of 1.42 billion, is a major distraction from the realities of the wealth that exists in the top segments of the population, the momentum of growth in these segments, and the trickle-down effect as more and more people see a rise in their standard of living and ability to save and invest.

To this end it is important to understand within the overall opportunity presented, where the opportunities are to be found and in which opportunities to focus on and optimise one’s brand.

State and Commercial Banks

The numbers one is dealing with represent opportunities as well as challenges. Simply looking at the State Bank of India, it recently passed the 460 million mark in customers. Bank of Baroda has 153 million customers. Still huge numbers exist with banks like HDFC, ICICI, Axis, Kotak Mohindra, IndusInd and others.

These are huge numbers to deal with and create two major points of focus for the commercial banks and their private client wealth management units:

1. Firstly, they need to be hugely disciplined with client segmentation and what they are realistically able to deliver. In particular, this determines the product line within regulatory limits that can be delivered, and the manner of delivery (digital only vs. digital and human touch).

2. Secondly, the solution has to be immensely scalable, and the opportunities are so large

that focusing and excelling on this scalability in one segment would be a better outcome than being sub-standard in multiple segments. Place your bets!

For the State and Commercial Banks to successfully combine private banking with their huge retail and mass affluent platforms will be challenging as has been seen in the west. The culture and mindset of a retail/mass affluent private client offering does not

mix well with that of a HNW and UHNW offering. Notwithstanding this, there remain targeted opportunities, particularly where there is the benefit to leverage the capital markets opportunities of the investment banks and the cross selling to promoters of capital markets opportunities and products such as structured finance solutions.

The resounding comments from our meetings in this sector (which were echoed across all the sectors) was the challenge of recruiting, training and retaining the numbers of front-line staff to service these enormous client banks, waiting to be looked after. As one of the senior executives at a State bank commented, we have a unique problem in that we have too many prospects and not enough advisors!

International Private Banks

A consistent comment from our meetings was that there is a resource mismatch in India. The UHNW and HNW clients in India are

becoming far more sophisticated and are transitioning to a more professionalised approach to managing their wealth. This has created a number of interesting issues and observations:

1. Firstly, there is a lack of human talent within India that has the global, sophisticated exposure that these clients demand. This is a positive gap that could be filled by the international private banks, and bankers who are currently overseas and want to return home or build their Indian franchises. Indeed, we met one senior UHNW relationship manager who had done just that.

2. A weakness of the international private banks is that for many, their onshore India business has been there to complement their offshore relationships. The result is that they are not fully on the radar screen of global management and there has been a distraction with North and South-East Asia. This is a significant strategic error given that the largest percentage of share of wallet of these clients is actually their domestic asset base which is growing by leaps and bounds. International Private Banks would do well to switch at least some attention from the rest of Asia to South Asia, and pursue their client onshore asset base in India which is rapidly being monetised.

3. The Indian UHNW and HNW clients are typically successful and highly driven entrepreneurs. For this wealth segment, flexibility and adaptability are critical criteria. The result is that if a bank is operating off its own proprietary platform, and that platform is insufficiently diverse,

providing a comprehensive range of product and service solutions, then these clients will look elsewhere for that flexibility. This creates an importance for the international private banks in India to enter into strategic relationships with key service providers such as wealth planning, legal advisors and trust and fiduciary services providers.

4. Comments were made that one of the issues for the international private banks is that their global management simply do not understand how India works. The result is that often the wrong decisions are made and repeated. The answer from some was that in order to enter into the market at the right scale, these banks would need to acquire existing businesses that would benefit from the international brand whilst retaining the character and knowledge base of the existing management teams.

The biggest challenge for the international private banks is to be able to compete with the independent wealth managers and

the small but growing contingent of multi-family offices who typically have the diverse product and services solutions that the UHNW and HNW clients are looking for. There is a clear need to adapt their models to compete with these wealth managers by replicating their product and solutions platforms whilst providing additional value based on their global expertise and connectivity –the competition is however set to continue to be fierce.

Non-Bank Wealth Management Firms

This segment is probably the most exciting segment in the Indian market for the UHNW and HNW client base, and indeed provides a template for what the international private banks should be emanating (both in India and indeed elsewhere). The successful firms in this space have structured themselves by both client and by default, regulatory segment. They have ensured the implementation of DIY, distribution and advisory related models, filtering their product platforms for each segment as appropriate and

providing an integrated platform of solutions which can be cherry picked by their clients.

Importantly they have embraced technology and leverage the ability to use technology to deliver different touch and feel solutions from a full digital DIY engagement to a combination of digital and human touch to deliver more advanced services up the value chain and wealth segments. This flexibility of approach is of course highly attractive to clients seeking more flexible solutions, perhaps combining DIY, distribution and advisory into their overall relationships. Furthermore this addresses the multi-banking needs and characteristics of India wealth.

Indeed, some firms in this segment have such a powerful proposition that they are now a threat to international private banks in territories such as Singapore and Dubai. We are seeing some of these firms who used to rely on working with international private banks for custody and investment services for their NRI clients, moving into competing directly in this space as they have found the services provided disappointing at best. This is illustrated by the recent acquisition of a Relationship Management from a Singaporean Private Bank by an Indian wealth management firm who is now building a franchise in Singapore and the UAE.

Finally, as alluded to, these firms often have combined wealth management, asset management and capital markets businesses under one roof. They offer the holistic range of solutions demanded by the UHNW and HNW segments, including wealth structuring and family office solutions, and they have created

all the required product streams through DIY, Distribution and Advisory Models.

I recall a number of years ago being asked by a consulting firm what the ideal wealth management platform would look like and it was quite an easy question to answer – take Charles Schwab and copy and paste. Give the client the choice to enter via different verticals and indeed price the verticals appropriately and let them combine these verticals. In India this is precisely what I have seen with some of the Non-Bank Wealth Management firms and the reasons for their ongoing success are very clear –they have client centric wealth management model’s which deliver to the client what the client wants and needs.

Multi-Family Office (MFO)

Whilst the non-bank wealth management sector has significant opportunities in scale, the dedicated MFO sector exists and is likely to starting to grow rapidly as the UHNW segment appreciates the ability to cost effectively outsource their investable asset management, account aggregation and portfolio management on a fully transparent fee basis.

Whilst this MFO opportunity is offered by some of the wealth management firms, there will always be a slight reticence when a firm also has its own asset management and product lines which may create conflicts of interest. It is therefore important to assess when looking at the MFO market who the pure plays are.

The UHNW Indian client segment, both domestic and non-resident is increasingly inclined to embrace the transparent fee model for advisory services. With no reliance on retrocession payments and full alignment with the client’s objectives whilst delivering a highly professionalised holistic experience, this segment is growing with the market and will undoubtedly continue to attract a growing client base, in particular from the next generation of the old wealth and from new wealth being generated by the younger generations who have had international exposure and seen the benefits of the transparent fee model.

With the centi-millionaire market growing, and wealth management becoming more professional among these successful families, engaging a Multi-Family Office

(MFO) has become increasingly cost-effective. An MFO can consolidate and aggregate banking and wealth management relationships. It also acts as an outsourced CIO, advising on portfolio management, product selection, and cost management. This segment, therefore, holds tremendous prospects.

The Asset Management Industry Opportunity

During our trip, there were very clear messages from the asset managers we met, namely:

1. Global investors are only just beginning to realise they are missing out on an incredible story in India – money wants and should be coming into India.

2. The opportunity for these inflows creates the opportunity for the Indian Government to loosen its capital controls further. If inflows from global investors can offset prospective outflows from Indian resident investors seeking global diversification, then the opportunities are obvious.

3. Every single asset manager we met, without fail, is setting up an operation in GIFT City. Investment is being made, and as the business starts to flow and confidence builds the opportunity will accelerate.

4. For non-Indian asset managers there is the opportunity to leverage their global distribution channels by either partnering with Indian asset managers or setting up their own infrastructure and capabilities.

With the regulatory environment in India favouring mutual funds and exchange traded funds, one just has to follow the money and

projections on economic growth to see the upside in asset capture for the fund management industry.

For the Indian domestic asset management industry, there is

a clear advantage for them to not only focus on the domestic opportunities, but to also grasp the global opportunities, as global investors recognise they are wildly under exposed to the Indian economy.

In the meantime for non-Indian global players, there is a growing opportunity to benefit from the two way capital flows that GIFT City is designed to promote, and where their expertise in non-Indian capital markets can be brought to bear as Indian investors are able to increase diversification of their portfolios.

Summary

The above comments barely scratch the surface of the opportunities in India. Inevitably there are challenges in executing,

but for the asset and wealth management industry in both India and globally, this economy and market has been ignored for too long and is ripe for attention, re-focus and a significant increase in portfolio and business allocation.

At Hubbis we have seen this opportunity and will be writing further, interviewing and publishing relevant content by thought leaders, and working with the asset and wealth management industry in India to support them in growing their brands, training and educating their key staff and providing them with content that will support them in key decision making.

We are very much looking forward to working increasingly with our friends in India.

« ‘‘If you are in the asset management industry and have not heard of the Gujarat International Finance Tec-City, otherwise known as GIFT City, then you are missing out on what is likely to be one of the biggest opportunities for transformation in Indian asset and wealth management services.’’ »

OUR ENGAGEMENT WITH INDIA IN 2024

The Hubbis Team eagerly anticipates delving further into the themes explored this January with industry leaders at our upcoming India Wealth Management Forum 2024

The Forum aims to expand upon the crucial insights gained from industry leaders regarding key opportunities and challenges in the market. We will explore a range of topics, including the evolution of wealth management, addressing the needs of India’s HNW and UHNWI families, enhancing client services, optimising investment offerings, talent acquisition strategies, the significance of GIFT City, and more.

For more information, please visit the forum’s homepage. If you have any questions regarding this article, or the forum - from discussion topics to participation details - feel free to reach out to us

THE CHALLENGES AND OPPORTUNITIES AROUND DEVELOPING A NEW FINANCIAL CENTRE IN INDIA A DEEP DIVE INTO GIFT CITY

SUMMARY

In the dynamic landscape of global finance and business, certain locales emerge as pivotal hubs for international trade and investment. GIFT City, or Gujarat International Financial Tec-City, represents India’s strategic endeavor to establish such a hub. As an ambitious project, GIFT City is designed to be at the forefront of India’s rapidly expanding financial and tech sectors, equipped with a host of incentives and infrastructural benefits. This comprehensive overview will delve into the genesis, growth, and distinct attributes of GIFT City. It features insights from esteemed stakeholders, including the much-appreciated participation of Nishith Desai of Nishith Desai Associates, who has been an active participant in the GIFT City project since its inception, as well as the perspectives of seasoned market experts. Discover why GIFT City is poised to carve out a significant global niche and why it is gaining traction with businesses and investors as a premier destination for the region’s and possibly the world’s high-net-worth individuals.

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SETTING THE SCENE – AN INTRODUCTION TO GIFT CITY AND ITS APPEAL

India’s first International Financial Services Center (IFSC), the Gujarat International Financial Tec-City (GIFT City) was set up in 2015 near Gandhinagar, Gujarat’s capital. In recent years, the GIFT City IFSC has presented more competitive benefits for offshore investors. New tax rules exempt entities in the IFSC from various taxes including GST, dividend distribution tax, and capital gains tax.

Location, Location

GIFT City, birthed from a strategic tri-city approach, is situated on the Sabarmati River and positioned equidistantly between Ahmedabad and Gandhinagar, each just 30 minutes away. Ahmedabad serves as the state’s industrial and historical hub, while Gandhinagar functions as the state capital and the nexus of policymaking. Each of these three locations - GIFT City, Ahmedabad, and Gandhinagar - offers a unique ecosystem tailored to support business, financial services provider, exports, international finance, and foreign investment. Additionally, GIFT City boasts impressive connectivity: it’s a mere 20 minutes from Ahmedabad International Airport, lies along the National Highway 48 within the Delhi-Mumbai Industrial Corridor, is connected via metro to Ahmedabad, and is just 15 minutes away from both the nearest railway station and the under-construction high-speed rail approved by the central government.

Casting a wide net

GIFT City boasts a multifaceted special economic zone, being India’s first IFSC designated as such under the Special Economic Zone (SEZ) Act, 2005, serving an array of financial

services and related sectors, such as banking, capital markets, fund management, insurance, bullion, finance companies, and leasing activities for aircraft and ships. It also accommodates global in-house centres (GICs), FinTech enterprises, foreign universities, and supplementary services.

In turn, GIFT City’s Domestic Tariff Area (DTA) offers advantages to a broad spectrum of industries. These include banking, maritime clusters, finance, insurance, IT and IT-enabled services, engineering, FinTech,

automobiles, capital markets, pharmaceuticals, and biotech

So who should move in?

GIFT City has established itself as a hub for a wide variety of financial and ancillary services, making it an ideal location for numerous types of operations. Businesses and institutions involved in offshore banking can explore activities like borrowing, lending, deposits, and external commercial borrowing along with trade finance. Those interested in trading can consider

becoming trading and clearing members, particularly for derivative products. Insurance entities, be it offshore or IFSC specific, can engage in direct insurance, reinsurance, and intermediary operations.

The region also presents significant opportunities for alternate investment funds, portfolio management services, and investment advising. Entities that cater to wealth management, fund accounting, trustee services, and custodial functions will find a conducive environment in GIFT City. It’s also apt for capital market operations, including derivatives trading in equities, indexes, currencies, and commodities, along with debt listing and other trading and investment activities.

Furthermore, GIFT City can serve as a base for global in-house centres (GICs) and a range of support services such as accounting, auditing, legal, taxation, trusteeship, management consulting, and compliance. Lastly, the city is

MR. NISHITH DESAI Founder and Head – International Taxation Practice

Nishith Desai Associates

nurturing emerging businesses in areas like aircraft leasing, FinTech, the International Bullion Exchange, and finance companies, making it a comprehensive destination for diverse financial and business operations.

The GIFT City Template

When compared to global financial centres, GIFT City should hypothetically stand its ground with features like a unified regulatory authority, a competitive tax framework similar to jurisdictions like Singapore and Mauritius, lenient company law, a strategic time zone, and an international arbitration center.

Choosing GIFT City as a business destination offers companies, investors, and service providers distinct advantages. The region’s planned infrastructure, streamlined administrative processes, and digital framework translate to benefits like singlewindow clearance encompassing everything from allotment to

occupancy, duty relaxations like exemption from Gujarat’s stamp duty and registration fees, and developmental incentives by the state.

Existing Benefits

Units operating in the GIFT City are said to be privy to a range of fiscal benefits, according to the reports which are currently available.

Income Tax Benefits

: Units can enjoy a 100% tax exemption for any 10 years within a 15-year span. They can choose which 10 years within that timeframe.

In the IFSC, the Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT) rate is 9% on book profits.

Companies opting for the new tax regime in the IFSC are not subject to MAT.

Since April 1, 2020, dividends distributed by companies in the IFSC are taxed at the shareholder level, after

SATYEN PATEL Executive Chairman Eton Solutions

India abolished the dividend distribution tax.

Investor Incentives:

Interest income on loans to IFSC units is non-taxable.

Interest from specific bonds listed on IFSC exchanges is taxed at 4%.

Gains from the transfer of certain securities by a nonresident on IFSC exchanges are not taxed in India.

GST Implications:

Services exchanged between IFSC units or given to IFSC/SEZ units

and offshore clients are GSTexempt.

Services provided to the Domestic Tariff Area (DTA) do incur GST.

Transactions on IFSC exchanges are GST-free for investors.

Other Tax Benefits:

Units in the IFSC receive state subsidies on lease rentals, provident fund contributions, and electricity charges.

Investors are exempt from specific transaction taxes and stamp duty on IFSC exchanges.

Operational Benefits in GIFT City:

IFSC units have exemptions from currency control regulations.

Under the SEZ Act, an IFSC unit is essentially treated as a nonresident, giving them benefits similar to the Foreign Exchange Management Act of 2002 (FEMA).

Although there are general restrictions on Indian investments in foreign firms in the finance sector, the Reserve Bank of India (RBI) introduced a circular in May 2021. It allows

Indian entities to invest in certain funds, including those in the GIFT IFSC.

Strategies for the future

Under the Finance Act of 2023, several initiatives have been introduced to boost growth in the GIFT City IFSC. The definition of ‘original fund’ has been revised to ease the tax-neutral transfer of offshore funds that are entirely owned and overseen by the Abu Dhabi Investment Authority and the Government of Dubai to the IFSC.

Alternative Investment Funds (AIFs) set up in the IFSC will now enjoy an exemption from the angel tax imposed on shares from non-listed Indian companies.

In addition to these measures, the tax holiday for Offshore Banking Units (OBUs) in the IFSC has been expanded to 100% for the assessment year that starts on April 1, 2023. To further attract non-resident investments in the IFSC, the dividend distribution tax for IFSC units has been reduced to 10%, in contrast to the 20% applied to dividends for non-IFSC Indian companies. Non-residents earning interest income from long-term

or rupee-denominated bonds listed on IFSC stock exchanges will also benefit from a concessional withholding tax rate. Lastly, the tax advantage duration for AIFs relocating to a fresh spot in the GIFT City- IFSC has been prolonged to March 31, 2025, from the earlier deadline of March 31, 2023.

What is the proposition that GIFT City represents?

When considering what stakeholders perceive as the primary opportunity presented by GIFT City, a slew of optimistic responses emerge. Senior Managing Director Nakul Beri and Director of Business Advisory

Yeole from Waterfield Advisors, a pure-play advisory firm, offer a compelling perspective. According to Beri and Yeole, GIFT City stands as a potent proposition for their advisory-based organizational model. Before GIFT, conventional investment routes for non-residents directed towards India typically spanned Singapore, Dubai, and Mauritius. However, GIFT City’s trajectory, characterized by improving regulations and ease of doing business, aligns it with the likes of Dubai and Singapore. The duo emphasize how GIFT allows them to “leverage the overseas market” and cater to investors more acquainted with the advisory model, thus expanding their global outreach.

Rewinding the clock, Axis Bank pioneered its foray into GIFT City by establishing its IFSC Banking Unit (IBU) in November 2017. The primary motivation, as elucidated by Apurva Sahijwani, EVP & Head - Burgundy Private at Axis Bank, was to augment options for the bank’s international business. The Axis IBU offers a plethora of specialized services, including Corporate Banking, Trade, Treasury Dealing Room, and Capital Markets. Notably, Retail Banking services tailored for Non-Resident Indian

Vishal

INSIGHTS FROM WITHIN: HOW OPERATORS WITHIN GIFT CITY VIEW THE PROPOSITION

Framing the Section

As GIFT City steadily ascends on the global financial stage, it beckons us to listen to the resonant voices of industry luminaries. Their insights, garnered primarily from a discreet gathering convened by Hubbis in the heart of Mumbai in August 2023, bolstered by comments sought by Hubbis in the wider India private banking and wealth management industry, reverberate with the promise that GIFT City holds for businesses. Particular thanks is to be attributed to Nishith Desai, the founder of research & strategy driven international law firm, Nishith Desai Associates, and a key figure in the emergence and development of the GIFT City proposition, who kindly joined the discussion to contribute eminent insights into the evolution of GIFT City, and marked input for this article.

With a keen ear attuned to the views of industry stalwarts, our mission was to decipher the unique proposition that GIFT City unfurls before us. The chorus of positivity that ensued was marked.

(NRI) customers are also on offer. With evolving regulatory dynamics, Axis Bank reaffirms its commitment to enhancing its product and service spectrum via the IBU, catering to both global and domestic clientele.

IndusInd Bank echoes similar enthusiasm. Head - Affluent Banking & International Business, Samir Dewan, articulates the bank’s proactive utilization of GIFT City. Dewan underscores GIFT City as pivotal for “On-shoring the Offshore Services” as India marches towards its ambition of a USD 5 trillion GDP. IndusInd Bank’s GIFT City IBU is robust, offering an array of banking solutions for a diverse clientele. Dewan mentions groundbreaking initiatives such as participation in the Block-Chain based Real Time USD Settlement System and International Trade Finance System platform, among others. The bank’s

expansive investments in terms of staffing, infrastructure, and capabilities at GIFT City substantiate its long-term growth strategy.

Participants in our discussions mirrored the buoyant optimism articulated by these industry titans. The overarching sentiment is unequivocal — GIFT City, when optimally realized, represents

India’s financial ecosystem. Its momentum, powered by a dynamic regulatory landscape and strategic global alignment, presents financial entities with a lucrative proposition. India’s entrepreneurial and financial trajectory shines brighter with the promise of GIFT City, awaiting the dawning of a transformative epoch it promises to usher.

potential for India’s High Net Worth Individuals (HNWIs) as well, further underscoring the significance and optimism surrounding GIFT City’s future.

Do you think that GIFT City offers great potential for India’s HNWIs? Why might that be?

A prominent sentiment among the attendees at the Hubbis discussion when faced with this question was optimism. One senior guest noted that although India might not yet boast the same international brand recognition in finance as some global heavyweights, GIFT City is “rapidly evolving” to position itself as a significant player in the world financial stage. With India’s undying momentum and the project’s unwavering vision, this sentiment is not surprising.

Echoing this optimism was another guest, who highlighted that the GIFT City aspires to stand alongside financial giants like London, New York, or Singapore. This is no modest goal, they noted,

however, requiring vast changes in regulations and significant brand building on an international scale.

In its early stages, GIFT City seems keen on winning over local Indian investment. This initiative has been described as a “laboratory” by one representative for GIFT City at our discussion for experimenting with financial regulations and incentives, setting the stage for a formula that promises robust, sustainable growth, with longevity for the project clearly on the mind.

Turning to insights from the industry at large, who kindly offered their insights on the topic, Apurva Sahijwani, EVP & Head - Burgundy Private, Axis Bank, underscored the rapid globalization pace of India, envisioning the GIFT City as a unique destination for international financial services. For India’s HNWIs, GIFT City represents a golden opportunity to invest in offshore products in foreign currency while staying within India’s borders. Sahijwani believes that an attractive tax regime, combined with an enabling regulatory environment, will address HNWIs’ critical needs, leading to operational convenience and superior post-tax returns. He further added that Axis Bank is

geared to support this journey by offering a suite of products and services at GIFT City.

Mr. Samir Dewan, Head - Affluent Banking & International Business from IndusInd Bank commented independently of the Hubbis discussion on the tax benefits and exemptions GIFT City brings to the table. Both international UHNWIs and resident Indian UHNWIs can set up Family Investment Funds in GIFT City, enjoying several perks. He emphasized that steps like these are indeed heading in the right direction.

Nakul Beri, Senior Managing Director, and Vishal Yeole, Director of Business Advisory from Waterfield Advisors also offered their expert insights when reached out to for comment, pointing out an emerging trend. Typically, Indian UHNWIs have looked to Singapore and Dubai when considering overseas jurisdictions. However, more and more are now turning their gaze towards GIFT City, attracted by stable regulations, proximity, and competitive setup costs. The comforting factor for many is the ability to have an offshore presence while staying connected to their home country.

Turning back to the Hubbis discussion, a sentiment that encapsulated the ongoing discussion came from a guest who cleverly coined, “It’s not offshore, it’s midshore.” This remark raises an intriguing point: does GIFT City need a clearer, more defined structure to genuinely rise to prominence?

Is there any particular developments you would like to see occur with GIFT City as it develops beyond its fledgling stages?

GIFT City, India’s ambitious project to create an international financial hub, is an evolving jurisdiction attracting significant attention from financial experts and stakeholders. The city, though brimming with potential, faces hurdles related to regulations, brand recognition, and infrastructure.

A key aspect highlighted in the recent Hubbis discussion was

the need for a clear and concise vision for GIFT City’s future. As one participant in the Hubbis discussion pointed out, “GIFT City offers unique advantages.” These advantages, such as amalgamating various ministries to ease clearances for newer entities, have been instrumental in attracting global giants like Bank of America. Furthermore, the city’s taxation exemptions for operational entities act as a magnet. However, there’s a growing demand for clarity regarding these offerings’ depth and their potential evolution. In essence, stakeholders are seeking certainty.

Apurva Sahijwani, EVP & HeadBurgundy Private at Axis Bank, elaborated on the collaboration between the bank and the regulatory authority, IFSCA. He noted, “Through our IBU in GIFT City, we’ve been liaising closely with the IFSCA for the development of the banking ecosystem.” Sahijwani stressed the need

for harmonization between the onshore regulations in India and GIFT City. Enhancements, such as local infrastructure development and a social ecosystem for executives, would further solidify GIFT City’s position as a leading financial hub.

However, challenges remain. An expert contributor at our Hubbis discussion mentioned the need for better living conditions for expatriates, emphasizing that having a genuine presence in the city is pivotal for global recognition. Another participant highlighted the disparity between inbound and outbound activities, stating, “Inbound is a fantastic mechanism they’ve created. Outbound is a challenge.”

The recent Hubbis discussion also shed light on the potential risks of GIFT City attracting a particular business type. There’s a concern about smaller businesses or startup entrepreneurs posing systemic risks, reminiscent of scenarios observed in Singapore. However, the consensus is that established families with a robust track record don’t pose such risks. Creating a conducive regulatory environment becomes paramount to ensure their longevity and success.

Do you feel confident in engaging with GIFT City?

When experts were questioned about their confidence in engaging with GIFT City, the responses were overwhelmingly positive. Nakul Beri, Senior Managing Director, and Vishal Yeole, Director of Business Advisory at Waterfield Advisors, shared their optimism. The pair commented that, “The IFSC authorities are extremely approachable, with a listening attitude and a vision to progress in the best interest of the stakeholders.” They continued, adding to this sentiment by highlighting the IFSCA’s openness to suggestions and their resonance with the investor community.

This perspective on the cooperative nature of GIFT City was further echoed by a participant in a recent Hubbis discussion. They remarked, “You can influence the system or GIFT City when it comes to inbound. They are very cooperative, always willing to lend an ear, hear you patiently, and make the changes.” Such feedback underscores GIFT City’s commitment to being a partner to investors, particularly for firms managing inbound activities.

However, as with all burgeoning ecosystems, there was an acknowledgement that are challenges, and areas for improvement. Over the past 18 months, GIFT City’s regulations have been evolving at a commendable pace. Yet, there are teething issues and technical aspects that stakeholders must navigate. One of the major points raised is the need for efficient communication and a streamlined vision, especially given that onshore regulators, including the RBI and SEBI, have authority over the movement of capital out of the country.

Addressing these concerns would mitigate ambiguities and bolster

investor confidence. As the experts concluded, refining these elements could amplify GIFT City’s proposition, paving the way for India to firmly establish itself as a global financial hub

Concluding Thoughts

Reflecting on our investigation into GIFT City, it emerges as a profound symbol of India’s unwavering dedication to its financial aspirations, representing a microcosm of India’s intrinsic potential and promise. GIFT City aspires to be a focal point of innovation, infrastructure, and opportunity, aiming to strategically position India within the ever-

evolving financial topography of the global arena.

The progression towards the conceptualization and realization of GIFT City has been characterized by episodic instances of inspiration and tenacity. Simultaneously, it confronts a labyrinth of intricacies and challenges. As an expert articulated during our recent discourse, “the establishment of an offshore financial center necessitates an intricate balancing act between safeguarding integrity and ensuring autonomy.” This statement aptly encapsulates the formidable challenges accompanying the initiative.

Nevertheless, GIFT City, through an astute amalgamation of strategy, regulatory oversight, and innovative praxis, has the potential to sculpt a robust financial trajectory for India. This metropolis is poised not merely as a prospective epicentre for financial operations but also as a

reflection of India’s visionary ethos, resilience, and overarching ambition.

The deliberations from our behind-closed-doors discussion, supplemented by insights from industry insiders, emphasize the requisite of perpetual adaptation, innovation, and evolution in the dynamic realms of finance and jurisprudence. The GIFT City

HUBBIS AND INDIA IN 2024

narrative transcends its identity as a mere financial nexus. It symbolizes a continually unfolding chronicle dedicated to the unyielding quest for academic and operational excellence. As GIFT City forges ahead, it extends an invitation to stakeholders across various spectra to engage in this transformative journey.

Interested in taking part in similar groundbreaking thought leadership discussions in 2024? Be sure to join us for our Hubbis India Wealth Management Forum 2024.

Taking place on Wednesday 28th August, the forum will explore the unfolding trends within India’s flourishing private wealth sector, highlighting the modernisation of wealth and legacy planning, the trajectory of insurance solutions, and the role of digital innovation in augmenting advisory services.

Register for the forum HERE.

SUMMARY

In the dynamic and interconnected world of finance, taxation intricacies often pose unique challenges. For high-net-worth Non-Resident Indians, particularly those in the UAE, these complexities can have significant implications. Mark Smallwood, Engagement & Consultant Partner at Hubbis, delves deep into the tax concerns faced by NRIs in the UAE who frequently visit India. He provides a comprehensive understanding of the fiscal landscape that these individuals must consider, and the importance of meticulous planning in ensuring tax compliance.

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Dubai, and the UAE in general, has become a haven for highnet-worth Non-Resident Indians (NRI) and their families. With flight times to Delhi, Mumbai and Bangalore under 3.5 hours and only a 1.5-hour time difference, the opportunity to move residence to the UAE and potentially reduce taxes significantly, is a very tempting proposition.

Notwithstanding this, with the lax pre-Common Reporting Standards days well behind us, and the effective implementation of enhanced digitised immigration controls making the efficient monitoring of travel flows available at the press of a button, it is vital to ensure that this planning is effectively executed as the implications for getting it wrong can be very serious.

To this end the aim of this article is to provide the NRI or prospective NRI reader and their bankers or advisors with a summary of the key factors to consider, which ensure a starting point for analysis and confirmation with their tax advisors.

The Basics

The Indian fiscal or tax year for individuals runs from 1st April to the end of March of the following year. Taxation is based on residential rules and is based on the period in which the individual is physically present in India.

A tax resident of India is taxable on their worldwide income and assets, and the reporting requirements and disclosures of interests are very comprehensive indeed.

The Complexities

To be resident for tax purposes in India, an individual is deemed to be resident in India if they are

physically present for a period of 182 days or more in the tax year (182 day rule), or if they are physically present for 60 days or more in the relevant tax year, and 365 days or more in aggregate in the four preceding tax years (60 day rule). If none of these conditions are met the individual is deemed to be a Non-Resident in that tax year.

For a person who is of Indian Origin (PIO), or an Indian citizen residing abroad and visiting India, or who is an Indian citizen and leaves India for employment abroad, the rules are slightly more liberal. So, for example, an Indian Citizen who leaves India for employment as a member of the crew of an Indian ship or for taking employment abroad will only be subject to the 182-day rule (the 60-day rule will not apply).

Similarly, if an Indian Citizen or PIO has taxable Indian sourced income of less than INR1.5 million in the tax year, and is resident outside India and visits India, then again only the 182-day rule applies. This is clearly designed to provide benefits to lower income people whilst capturing the highnet-worth NRI who is back and forth to India, typically retaining personal and economic interests in India. They are captured by the rule introduced on 1st April 2020, whereby an Indian Citizen or PIO resident overseas whose Indian sourced taxable income exceeds INR1.5 million during the relevant year will qualify as Indian resident if they are physically present in India for 120 days or more during the relevant year and 365 days during the previous four tax years.

In the above scenario there is a break given that an individual will

qualify as being Resident but Not Ordinarily Resident (RNOR) if they are resident for more than 120 days but less than 182 days. To be treated as RNOR (and as such being taxed on a similar basis to a Non-Resident Indian), the individual will need to have been non-resident in nine out of the ten tax years preceding the tax year for which residential status is being established OR their physical presence is less than or equal to 729 days during the seven tax years preceding the tax year for which residential status is being determined. If these conditions are not met, they will be considered to be Resident and Ordinarily Resident (ROR) in India (taxable on their world-wide income).

For the purpose of computing physical presence, it is not essential for the presence to be continuous or at the same place. Furthermore, the date of arrival and departure will count as full days.

Overriding citizenshipbased residential status

In addition to the above physical presence-based residential rule, the law provides overarching catch-all provisions. It states that a citizen of India, having total income, other than the income from foreign sources, exceeding INR 1.5 million during the tax year shall be deemed to be resident in India if he is not liable to tax in any other country or territory by reason

of his domicile or residence or any other criteria of similar nature.

This rule is meant for an alien resident who does not have a residential-based linkage with any Country. In such a situation, he is treated as an Indian resident liable to be taxed on worldwide income. This rule is of special concern for international workers and C suite executives who need to travel around the globe for work purposes.

The Foreign Status

In addition to ensuring that the rules in India are followed, it is therefore also vital for the NRI to have clear evidence such as a Tax Residency Certificate (Dubai) that they are tax resident in UAE (or another country). For those residing in Dubai and the UAE generally this can cause another major tripping point. The India-UAE tax treaty provides that individuals will be resident in the UAE if they are present in the UAE for at least 183 days in the relevant calendar year.

In addition, these certificates are issued on an annual basis, from the date of issuance, and it is clearly important that this period is coordinated with the Indian fiscal year, and that the individual renews the certificate in a timely manner for the following time period.

The result is that whilst the NRI, resident in UAE, is wholly focused on the number of days spent in India, they also need to be focused

on ensuring qualification for the Tax Residency Certificate in the UAE, otherwise they will be unable to provide evidence of their tax residence and the Indian authorities will have grounds to determine that they are actually ROR in India.

Summary

Bhaumik Goda, formerly of EY and a founding partner of BGSS & Associates (www.bgssassociates. com), and an advisor to UHNW families that straddle India, UAE and other parts of the world, summarises the situation perfectly well - “High Net Worth Indian Citizens and Persons of Indian Origin seeking to visit India regularly must maintain a detailed record of their visits and time spent in India. If they fail to do this and become tax resident, they will be required to disclose all information on all their income producing assets outside India, including trusts where they are a settlor, beneficiary or controlling person. The stakes are very high.”

The message is very clear that in an increasingly transparent world with information readily available and accessible, it is vital for highnet-worth Non-Resident Indians to carefully plan with their tax advisors their travel arrangements and that of members of their immediate families to ensure none of the trip wires are breached.