Wealth Management – a lucrative career!

Wealth Management is primarily about wealth conservation and wealth creation for the investors. The field came into prominence during the economic boom around 2005-2006. Wealth managers surprised markets with the kind of returns they offered to investors using complex stock market strategies.

Today, wealth management profiles can be broadly divided into three groups:

1. Front Office jobs that include services like advisory, sales, research and analysis, source funds, security management, and strategic partnership;
2. Middle Office jobs that primarily deal with risk identification and risk mitigation techniques; and
3. Back Office jobs that take care of operations and infrastructure, including software and network support

More and more Indians are now ready to take risks to create wealth. Several big and specialised investment bankers have entered the Indian market. Banks and fund houses are joining hands with big shots overseas to manage funds. This all has led to a sudden surge in the demand for qualified and skilled wealth managers in India.

Many people confuse wealth management with financial planning and investment management. There are slight differences between the three:

• Financial planning is creating a strategy to attain enough funds for the investor to fulfill retirement or other personal goals. It usually caters to middle-class people to help them manage resources in a judicious way and achieve their SMART (specific, measurable, achievable, realistic & time-bound) financial goals;
• Investment Management is about managing financial assets focusing on certain performance levels; and
• Wealth Management takes total net worth of an individual, a couple, or family in picture. The financial decisions in this field include investment portfolio of a person, as well as other financial components, such as insurance, real estate, business, taxes, charity etc. It targets High Net-worth Individuals (HNI), where challenges are of a different level. Wealth preservation is as important as wealth enhancement at this level.

A skilled wealth management firm pays attention to all the financial details in the life of their clients. They usually have a team of advisors and experts from various financial disciplines to look after the needs, goals and priorities of a client and then formulate an individualised strategy for them.

Qualifications and personality traits

The technical know-how in the field of wealth management entails exposure to various markets and financial instruments, various compliance and regulatory essentials in India, best industry practices in India and abroad, and pros and cons of investments in various asset classes.

Besides skills and proper training, one needs an excellent network to get an appointment with HNIs. Besides, wealth managers should have very strong product knowledge with a solid understanding of equities, real estate, businesses, various markets, and the impact of macro-economic issues. Sales and acquisition skills are of course required to deal with clients effectively and get desired results.

AIWM India website states that graduates with certification in wealth management, such as the Certified International Wealth Manager (CIWM) and relevant work experience stand a good chance to get jobs in the field of wealth management.

A Shiksha expert Rahul Chauhan comments, “Wealth Management is basically a sales profile. It involves selling of financial and investment products. Companies hiring for wealth management prefer employees with four years of experience in selling credit cards, insurance policies or any banking or financial product.

Ideally, a person looking to pursue a career in wealth management should be a graduate. He/She should pursue CFA course. Along with studying CFA he should also start working in banking, finance related companies, or research firms. After acquiring experience of 3-4 years, the person should do MBA/PGDM from a reputed B-School.”

Another Shiksha expert Ninad Mondkar says, "The Wealth Management (WM) industry is a niche segment wherein the services are offered to individuals who have amassed wealth and are looking to preserve it, and also maintain the same with the changes in their lifestyle! In short, this segment caters to the High Net Worth Individuals (HNI) and Ultra High Net Worth Individuals (UHNI). So any aspirant in this field should definitely possess good market knowledge, analytical skills, presentation and communication skills (apart from qualifications and experience)."

Mondkar mentions the following qualifications available in India to be a part of the wealth management industry:

1. Certified Financial Planner (CFP), which can be done after Class XII in any stream
2. Chartered Wealth Manager (CWM), which can be done after graduation in any discipline
3. Chartered International Wealth Manager (CIWM), which can be done after graduation in any discipline

Among the three, CFP is the most recognised & industry accepted qualification as of now and it will take some years to gauge the industry acceptability of CWM and CIWM, which are new entrants in the market.

Mondkar also warns that all companies in the WM industry are there to "sell their financial products!". In short it's a "revenue driven industry". An aspirant who is looking to make a career in the same (i.e. looking for a "job") should be comfortable with the "sales" side of the industry. Generally, people with the "Sales" background are preferred in the industry.

Career prospects

Wealth managers are usually employed by:

a) Banks with large distribution models;

b) Brokerage houses that focus on equity-led products; and

c) Boutique advisory firms that offer customised services and products to HNIs.

According to AIWM India, the career growth in the field of wealth management may look like this:

Since the field is relatively new, there is still a dearth of professionals in this field, so the competition may be relatively less. For all the young ambitious aspirants, wealth management holds bright career prospects.