“The new generation of wealthy are the ones open to using wealth-management services”  

Sharad Sharma (SS): Wealth management services in India started in 2001 and BNP Paribas was amongst the first to start. Since then we have been very consistently trying to emphasise more on the quality build-up rather than volumes. Our attrition rates for clients are very low. Acquiring client details is a long process and we would like our clients to stick to us for a much longer period. As of today, we have relations with around 1,000 family groups. Actual account numbers can be much more because one family can have 4 or 5 accounts. What is unique about our client relations is we give them a solution which is holistic rather than sticking to what the license permits.

 

SS: Our target market comprises business families, entrepreneurs, professionals and senior management professionals. The segment of smaller entrepreneurs is where we see the maximum possibility for our value-added services. That’s the most preferred client segment. And we know that tremendous growth is expected in the years to come. This also means more and more individuals are seeking specialised advice in managing their growing wealth.

 

SS: Last year, a lot of clients were moving out from risk assets to risk-free kind of assets. There is certainly a marked change in the situation today than it was a year ago. The rise in the markets has been swift so far. The sentiment has changed and investment appetite is gradually reviving, driven by the performance of asset classes. We feel that there is never is a perfect time to enter the market. Investment in equity has to be over a three-five year horizon. I must add, we were barely impacted by any loss in clients. There was a large segment among the wealthy which was not using wealth management services. They are using advisory services now rather than doing it on a standalone basis or picking and choosing each service provider for only the transactions they wanted to do.

 

SS: Client assets in all organisations are a mix of things and so an apple to apple comparison is not possible. But I can say our growth has been fast. I see growth in terms of adding more and more families. On the asset side, the growth based on the acquisition will keep on increasing as well as on the wallet size of existing clients.

 

SS: In fact, the new generation of wealthy are the ones open to using professional services. The reason is they have grown using the most modern facilities and practices available in their own industry and the same attitude applies for handling their wealth. They are very receptive to new ideas.

SS: The requirements, perceptions, risk appetite will be different for different segments. Segmentation helps in aligning the advice, products, services and delivery channels to their specific needs.

 

SS: The starting point is $1 million plus investment. That is a good starting point and we build on that.

 

SS: Well, all I can say is that BNP Paribas will shortly be completing 150 years in India, in some form or the other, so we have been around for a while now.

SS: We welcome competition because as more and more organised players come, the market practices will improve and ultimately it will be the resident Indians, who will have better services. We were early entrants, so we already have gone through the learning curve much earlier. We also bring in the best practices and more experience.

 

SS: The biggest factor is we are not transaction oriented. We are more focussed on long term relationship oriented approach.

 

SS: Our marketing is based on a simple principle: understand the client’s total requirement. We are not going to go with a single product but rather with a holistic approach. We find solutions for clients and not really sell products. That’s how we probably build.

 

SS: I think it is too premature for consolidation in wealth management segment because as of now the penetration levels are quite low. I think consolidation is a few years away.