Growing Importance of Wealth Managers
Who is a High Net-worth Individual?
High Net-worth Individuals are those who have liquid assets between Rs 5 lakh and Rs 5 crore. Liquid assets are those which are either in the form of cash or can be uncashed immediately with little or no loss in their value. Your savings in your bank account, fixed deposits, investments in stocks, etc., qualify as liquid assets. When this becomes clear we realize that most of us either qualify as High Net-worth Individuals or at least are on the fringes. Now one needs to ask this pertinent question if your worthiness would remain so under all circumstances. Even when your conventional source of income abruptly ceases? It is difficult to answer this question with certainty. It is thus not wise to live in uncertainty.
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Risks cannot be ignored
Additionally, the hazards of financial mismanagement are substantial without competent assistance. Financial mismanagement can lead to the loss of assets, investments that are losing money, and reserve funds that you had set up for unforeseen expenses. Financial mismanagement may push you into a vicious cycle from which it may be difficult to escape.
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Enter the Wealth Manager
This is where wealth managers come into the
picture. To lessen the financial uncertainties in your life, a seasoned wealth
manager would work for you. Your worthiness will increase with the assistance
of a wealth manager. For instance, the wealth manager would promote you to the
upper end of the High Net-worth Individual category if you began at the lower
end of the category and received the necessary advice. Your wealth manager's
ability to help you reach your financial goals may be shown by the rise in your
wealth.
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Role of wealth managers
Your risk, asset, and cash management, tax, retirement, and estate planning will all be assisted by a capable wealth manager. Even while it is generally recommended to get started as soon as possible, it is also preferable to start late than never.
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Origin of Wealth Management in India
In India. Banks were the first to offer wealth management services, which were afterward adopted by brokerage houses and boutique advice businesses. Banks originally began offering wealth management services by selling insurance and mutual fund products to private customers. Brokerage firms advertise as wealth management businesses. However, in the case of brokerage firms, the focus will be on investing in stocks, whereas other aspects of wealth management may not get their due attention. Boutique advisory firms provide customized wealth management solutions to their clients. In the beginning, the sector was dominated by the big players, however, aided by technology, there are several fintech wealth management firms that are now vying to make a mark in this specialized segment.
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Illustration
An actor based in Mumbai who got roles as a supporting actor in television had wondered for years where his money was going as his financial advisor would often ask him to exercise patience. The actor realized the value of wealth management some years later when his television appearances dwindled but his income didn’t. His wealth manager had made the risk assessment of the actor in terms of the limited shelf-life of the actor while planning for him. Thus, it didn’t matter to the actor even if the roles were hard to come by, he was financially sound and secure, thanks to his wealth manager.
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Objective assessment of your financial
status
People frequently give various justifications for not getting expert financial management counsel. Some people think they don't need wealth managers' assistance, while others haven't sought them out because they think they don't have "enough money" on hand. Because of this, a wealth manager's job becomes more crucial. Wealth managers have the necessary knowledge to assist you in making the best decisions and are able to objectively evaluate your financial situation. However, because your goals are long-term, wealth management calls for financial discipline.
Conclusion
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