Many organisations have a designation called the ‘Wealth’ manager. I have often wondered about the enormity of this task. You really have to be a friend of the client and you actually need only about 30-40 clients of good size to make a decent living.

How is a wealth manager different from a Financial Planner. Well even a fee only financial planner (let me repeat for a millionth time, I have not seen a creature like that in India) should be so far away from the product sale, and be so well informed that he should be able to give the following advise:

1. Hey Doctor invest in a new dispensary: Have you ever heard a financial planner say that? I have not and there are many of my friends who are doctors, dentists, etc. They only hear pension plans, endowment plans, mutual funds, sip,…

2. There are good equity brokers who will charge you a fee but lick the index by a mile: Almost impossible for a FP to say this, because he has been brought up on American literature of ‘Index funds are superior to managed funds’ theory. In Indian conditions my portfolio consists of direct equity, hdfc top 200, hdfc equity, Franklin Prima, Franklin Bluechip, Templeton Growth fund, Hdfc prudence, I pru discovery, I pru dynamic – all of them have beaten their benchmarks, some of them by a mile. Forget index funds as long as Mr. Prashant Jain, Mr. Naren Sankaran, Mr. Siva and Sukumar are delivering index-smacking returns. My portfolio manager in equities has licked the index by a no. superior to all the above mentioned gentlemen, and does not liked to be mentioned by name. Thank you RM.

As a financial planner it is almost impossible to stick your neck out, so people hide under the index fund.

3. Discipline more important: If a client does not listen to a financial planner (his money dammit!!) will you give up the client or will the client give you up?

4. Hey client you listen to 4 people!: How can a fp stop a client from listening to his banker, insurance advisor, brother-in-law, …and every uncle, aunt and friend’s friend. This will lead to sub-optimal returns for sure.

It may be funny incident – but when a friend (member The Stock Exchange, Mumbai) was reviewing a client’s portfolio he saw some shares which he had not recommended. It turned out that the client’s father (a successful doctor) had asked him to buy the shares. The broker put the phone down and called the father, and said “I have started a new business, I am planning to write medical prescriptions”…the Doc had a laugh and apologised. He then called the client and said ‘Your father had no business recommending these shares, and you had not business asking him for advise on which shares to buy.’

Point taken – the relationship is now in the 3rd generation – and the kids of the 4th generation are in school. That is wealth management / relationship management. And they do exist in the by-lanes of Old Mumbai, starting from Colaba and Ending at Sion. 🙂 but they are hidden, rich, arrogant and not adding clients. Not because they do not need the money, but they are not sure whether the client will listen to them FULLY, not from one ‘tip’ to the other ‘tip’.