What is wealth manager’s role in helping an investor grow?

1. What is wealth manager’s role in helping an investor grow? www.avendus.com/india

2. Difference between investment and wealth managers When it comes to managing money, we like to do it in a wholistic way, irrespective of whether we ask for help from a wealth or asset manager to ride the course. While the term investment management and wealth management might sound very similar, do remember that both verticals are way different. An investment manager, basically, handles financial products, where as the wealth managers look after personal portfolios of finance of their clients. A bigger difference lies between their targets of performance and the measure. www.avendus.com/india

3. Further differentiation The investment managers work in accordance to the market indices. How they perform, depends a lot on the class of asset that they have invested in. It is therefore relative and usually concentrate on making correct decisions at the right time for securities in the client’s financial portfolio, so as to be able to make higher returns than the set bar. One the other hand, asset management companies in India need to give an absolute performance in the limits of the return and risk range that have been agreed upon by the investors. An investor’s financial needs can certainly not fluctuate with the whims of the market indices and hence, putting more pressure on a wealth manager than asset manager. www.avendus.com/india

4. Net worth maximisation Wealth managers who take it on them to make sure the accounts or balance sheets of the investors are balanced, advice the investors, firstly, on the assets that they need to build for their respective business. The assets that we talk about here are invested in and created because they are able to give income in return as they grow in value. The net worth of an individual investor is calculated by how much the assets are more than the liabilities. All kinds of decisions that wealth manager take for the investors should be with the sole goal of maximisation of net worth in the long run. www.avendus.com/india

5. The next step Moving ahead, the next step in making strategic decisions is about considering the composition, and mainly the quality of the investor’s asset portfolio. The rate at which an asset is supposed to grow, is the target rate. It is found by estimating the number of uses that the asset would be put to use in future. These are called financial goals. Amidst the right range to make sense of housing finances, the portfolio should be able to reach the target return. www.avendus.com/india

6. Reaching target return How does a wealth manager do that? Through allocating assets. It could be done passively by the use of a model allocation and even actively, by a more strategic allocation. It is on these grounds, that wealth management firms differentiate themselves. However, it does not change the core responsibility of managing a target return. It is important to remember that the asset portfolio does hold certain amounts of risks. www.avendus.com/india

7. Thank You www.avendus.com/india