Wealth management embraces all

BANGALORE: If you thought wealth management services are restricted to high networth individuals (HNIs), think again. Banks are today extending these services to even those in the annual income bracket of Rs 2 lakh to Rs 10 lakh.
"Extending wealth advisory services is a natural extension of a bank's business model. We offer such services to all our customers be it individuals, trusts, small entrepreneurs or corporates," says Om Ahuja, country head (investment management) of Yes Bank.
The public sector Union Bank of India recently tied up with Wealth Advisors India for providing wealth management services. "With the emergence of diversified asset classes, significant growth in income levels and awareness among people, there is great potential for specialized offerings," says Mahadevan V, CEO of Wealth Advisors India.
Entrepreneur B S Surendranath (41) has just bought an insurance policy, which covers critical illness on the advice of his banks wealth advisor. Surendranath, who runs restaurants in Bangalore and Mysore and also has a construction business, has been a customer at the Indiranagar branch of ING Vysya Bank for eight years. "Until the relationship manager informed me, I was unaware of policies in the market that covers critical illness," he says.
Surendranath has invested in ULIPs, SIPs and other financial products: "I didn't have any personal wealth advisor to guide me on investment planning. Banks coming with such services help to plan our savings and makes matters more convenient." Banks are distributors of funds and they earn a commission on each product sold. Most banks today follow an open architecture model where they offer all kinds of financial products.
Banks are conducting courses for branch managers on investment planning so they can advise customers. "We do micro marketing events in cities where we call customers and invite fund managers and wealth management experts to give talks on financial planning over a cup of coffee. We get great response," says Uday Sareen, country head (retail banking) of ING Vysya Bank.
A recent study has estimated that by 2012, the wealth management market in India will have a target size of 42 million households. In this growth, it is the mass segment the income group of Rs 2 lakh to Rs 15 lakh per annum that is expected to play a vital role. "About 40% of our network of 450 branches is in the semi-urban and rural sector. In the last six months, one-fourth of our sales have come from the these sectors," says Sareen.