I recently attended a Wealth Management Conclave held as part of the launch of a joint initiative by two large business groups, one Indian and the other global, to provide certification courses in wealth management.
Once the primary speakers finished, a few of who used plain speak and hence made a lot of sense, it was the turn of a panel of ‘experts’ to take the stage. What followed was on scripted lines with some trying to prove their superior wisdom using out of context quotes of global management gurus.
The best of the panellists was one from the public sector, who while not gifted with expression in the English language, clearly knew the ground realities in this segment and hence made the most sense.
Talking of ground realities, I found it ironical that many of the panellists and the anchor panellist himself spoke of the need to ‘train’ executives or make them go through a long apprenticeship of working under a well experienced practitioner as is the case for professionals like doctors, lawyers and chartered accountants, before they are allowed to even interface with clients.
Now, this was wonderfully utopian as one of the biggest banes in the industry and especially in the wealth management arms of certain banks, is the practice of setting near impossible ‘targets’ for even their freshest recruits.
This converts them into aggressive sellers of any financial product deemed fit by their bosses, sans even the minutest of thought about its suitability for a given customer. Ironically, some of the panellists were from the biggest names in the industry.
Another theme espoused by some panellists was about how technology was the future and will soon replace human interface, which I have been hearing since the Y2K days at the turn of the century. I, for one, am yet to come across a seriously high net worth customer that wants to be part of a mass solution without human interface. After a certain threshold of wealth, it is more about trust and comfort in dealing with wealth managers. Technology was, is and will be an incremental force, but to say it will soon replace a genuine wealth manager, is still far fetched.
Finally, there was an assertion by a non-practitioner on the panel that it was not difficult at all to collect advisory fees from clients, if one rendered ‘quality’ service. He even cited the example of people paying Tarot Card readers and palmists at shopping malls, and asked — so why should not they pay their wealth managers? Sounded good, but the fact is that there is a difference between a modest fee for a one off service that qualifies as entertainment and a repeated fee for a service advising inactivity (staying invested) is the key to wealth creation.