Wealth Management Industry

October 7, 2015

Wealth Management

A Sneak Preview to…

Wealth Management

What is Wealth Management ?

Investment Advisory Service consisting of :

Financial Planning &

Goal Setting

Investment Management

Retirement Planning

Estate Planning

Private

Portfolio

Management

Services

Who Provides these services?

Asset

Management

Companies

Portfolio

Management

Companies

Private Wealth

AdvisorsBanks

&

NBFC’s

Target Audience?

Target Audiences

High Net Worth Individuals

Small & Medium Enterprises

Professionals who lack knowledge in financial

markets

Individuals focusing on other core competencies

Complete analysis of your financial situation

Monitoring & Alteration as per changing requirements

Help build and protect your wealth

Professional management of your finances

Expert advice, every step of the way

Why Wealth Management ?

It simply includes

How did Wealth Management Evolve?

• Started in the early 1900’s by Brokerage firms.

• Lacked sophistication and holistic view towards Wealth Creation

• Wealth Management is a fairly new practice in the Indian concept and continues to evolve.

• Client’s needs – Monetary & Non-Monetary.

• ‘Client’ should be the focus not the ‘product’.

• Customized approach – One size fits all doesn’t work.

• Ongoing approach to achieve customer goals.

• Co-ordinated approach with various professionals involved.

• Simple & easy to understand advice.

Stages in Human Life…

The Wealth Planning Process….

DISCOVERY MEETING

Complete discovery process

INVESTMENT PLAN MEETING

Presentation of investment plan

MUTUAL COMMITMENT

MEETING

Confirmation of commitment

45-DAY FOLLOW UP

MEETING

Organization of account

paperwork

REGULAR PROGRESS MEETINGS

Review of progress and implementation

of wealth management

INVESTMENT PLAN

Analysis of current situation, our

recommendations for moving forward and

details on our investing approach

THE WEALTH MANAGEMENT PLAN

Comprehensive evaluation of the entire range of financial needs and

remanded strategies (prioritized)

Two Weeks One Week 45 Days 90 Days

The Wealth Planning Process….

Choosing services & Providers

Implementation

Ongoing evaluation & reporting

Monitoring

Client

Identifying your values & goals

Discovery

Building an Action Plan

Analysis & Recommendations

Comprehensive Wealth Planning Discovery

• Family, key issues

• Goals, retirement timing, special needs

• Values

• Comprehensive view of current financial picture

• Risk tolerance, time horizon, attitude toward volatility

Analysis, Recommendations

• Analyze personal, financial information

• Income goals, probability analysis

• Analyze liabilities

• Analysis of risks and treats

• Coordination with outside advisors

• Action plan: growth, preservation, transfer of wealth

Implementation

• Retirement and education plans

• Estate plan, trust, philanthropic plans

• Borrowing plan

• Risk plan including diversification, hedging, insurance, tax

minimization

• Family mission and bylaws

• Asset management

Monitoring

• Track progress toward goals

• Set / follow guidelines for liquidity, asset allocation

• Notification when portfolio strays outside guidelines

• Performance reporting

• Online access

Risk tolerance – Risk

ProfilingTime Horizon – Age

Assets & Liabilities –

Immediate & Future

Cash Flows –

Monthly/Yearly

Income & Expenses

Family Issue & Special

needsLifestyle Assessment

Retirement Plans –

Future needs

Discovery…

Suggestions & Recommendations - Investments

Suggestions & Recommendations - Retirement

• Assessment of current financial status

• Ascertain post retirement needs

• Determine what you need to save and how

• Find extra money for savings

Suggestions & Recommendations - Tax

• Income Tax Exemptions

• Splitting income by creating several entities such as HUF or Trust.

• Making gifts within specified limits

• Making investments which qualify for rebates

• Reducing taxable income by claiming expenses

• Philanthropy/ Charity

Income Tax

Suggestions & Recommendations - Estate

• Will Creation

• Trust creation

• Philanthropic Ventures

Asset Allocation

Strategy to divide the portfolio among various

asset classes:

Equity, Debt, Money Markets, Mutual Funds,

Structured Products, Real Estate etc…

Strategic Asset Allocation

Tactical Asset Allocation

Dynamic Asset Allocation

Policy constantly adjusted to markets

Tactical Deviations to capitalize on unusual investment

opportunities.

Base Policy Mix

Evaluating Investment Options

Research your Investments

• Discover historical trends

• Perform financial analysis

• Compare with the peer group

• Obtain relevant economic news

• Forecast future performance

• View recommendations of the experts

To…

Asset Class Characteristics

What one should keep in mind before investing…

Understanding of Risk :

1. Systemic Risk - Associated with the Market

2. Un-systemic Risk – Associated with specific firm, security or industry

• Risk is measured in terms of Beta

• Market Risk Premium

• Rupee Cost Averaging

• Look at historic trends

Portfolio Creation

• Diversification - Asset Class wise allocation

• Right Asset Allocation

• Aim : Maximize Returns & Minimize Risk

Money Market or Government

Treasuries will have lower risk and

lower returns

Investment – grade Corporate Bonds

Blue Chip (Large-Cap) Equities

Mid-Cap Equities

Small Cap equities will have

higher risk and higher return

potential

Retu

rn%

Return% (Standard Deviation)

Portfolio Tracking & Monitoring

• Tracking of progress towards goals

• Follow guidelines set during Asset Allocation

• Notification when portfolio goes astray

• Regular Monitor for returns

• Re-assess goals & objectively periodically as change asset allocation accordingly

What is Asset Management ?

• Generally done for Corporates & Financial Institutions as opposed to Wealth Management done for Individuals

• A sub-set of Wealth Management.

• Involves professional advice for investment into capital markets viz: stocks, bonds, real estate, mutual funds etc. – mutually co-dependant assets to gain optimum results.

• The focus is to decide the Asset Allocation & the Weightages in the Portfolio.

Value Based Investing

Stock Picking based on Intrinsic Value:

1. Analyzing Financial Statements

2. Look at Debt ratios

3. Cash Flows

4. Future Prospects

5. Earning Potential

• Picking Under Valued Stocks• Margin of Safety• Buying the Business & not the Share• Investment in Quality Companies and not just trading in shares

Fund Management

What is Fund Management?

Investors

Pool their money with

Fund Management

Invest in

Securities

Generates

Returns

Passed back to

Benefits of Investing in Funds

Broad Fund Categories

How to become a successful Wealth Manager ?

• Invest in Brand Building – Build Trust

• Offer a 360 – degree view

• Embrace Mobility

• Increase reach through Technology

• Focus on Transparency & Compliance

Invest in Technology to improve productivity and advisor retention

www.milessoft.com

India

Miles Software Solutions Pvt. Ltd.

B - 801, Trade World, Kamala Mills,

Lower Parel (W),

Mumbai – 400013.

T: +91-22-66518400

UAE

Miles Software Solutions FZ-LLC

210, Level 2, The Loft Offices,

Building# 2, Entrance C,

Dubai Media City, Dubai,

T: +971 (4) 422 5817

Philippines

Miles Software Solutions Inc.

Penthouse, 7944 Mavenue Building,

Makati Avenue, Makati,

Metro Manila, Philippines

T: +63 920 9525419

Partner Office – Europe

Funds-Axis Limited

31 Southampton Row,

London, WC1B 5HJ,

T: +44-7977-250034

Contact us

October 7, 2015