Page 44 - Banking Finance November 2019

ARTICLE

Banks - Banks are known to have larger investment management sector in India as the existing players are
distribution model which means that they do not expanding and diversifying their operations where as there
concentrate on only one investment options but on a large are new local and global players wanting to make a stand
investment portfolio. Further they cater also to mid-level here. As of now this industry is fragmented with lot number
segment clients apart from the HNWI's of brokers, sub-brokers, financial advisers, insurance and tax
consultants.
Brokerage Firms - Brokerage firms focus on investing the
customer's money majorly in shares and IPO which are equity Financial institutions like Reliance Money, Aditya Birla
market products. Group provide these services. Private banking divisions of
popular lenders such as Barclays, Deustche Bank, ICICI Bank,
Boutique advisory firms - Boutique advisory firms are known HSBC and Kotak Mahindra are already well established in
to provide customized financial solutions to the clients which this segment. Customers can also opt for public sector banks
are majorly the ultra-HNWI's (greater than USD 30 million) such as Indian Bank, Canara Bank and State Bank of India
and HNWI's(USD 1 million to 30 million). for availing wealth management services.

Competitive Players of Wealth The entry of public sector banks in the wealth management
domain cannot be neglected. They possess prodigious brand
Management in India equity, influence, corporate affiliations which can prove as
The competitive rivalry is increasing in the wealth a tough competitor for the existing players.

Players in the Wealth Management Space

Business Market Examples Main Characteristics
Models Position
Universal Banks Strong Kotak, HDFC, ICICI, O Developed lending offering
HSBC, Axis O Good reach.
O Large players, relatively low entry levels for
wealth management services.
O Cross-sell potential with retail/corporate network.
Wealth Medium Deutsche, O Primarily foreign players with focus on advisory
Management BNP Paribas and offering of managed/structured products.
Specialists O Wide range of wealth management entry levels;
typically high entry barriers.
Global Investment Weak Morgan Stanly O Focus on the ultra high net worth segment.
Banks O Institutional approach to serve clients with
investment banking products.
Brokers/Dealers Strong DSP Merrill Lynch O Wide range of brokers targeting mass affluent market
(Online, Retail) ICICI Direct without focused approach for the HNWI segment.
O Domestic equity/mutual funds focus.
O Limited research recommendations.
Family Office Weak Client Associates O Holistic advisory services for specific client segments
such as entrepreneurs, professionals.
Others Medium Independent Fund/ O Very low entry levels
Insurance Advisors O Serve clients across segments
O No dedicated wealth management offering
O Commission-driven model.

Source : Cognizant Research Center analysis.

44 | 2019 | NOVEMBER | BANKING FINANCE