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- The Indian wealth management market is expected to grow at a CAGR of 15-20% to reach $3 trillion by 2025.
- But the industry is still inefficient, says Ankit Garg, Ex-HDFC Private Banker and Founder of Wealthy Nivesh.
- See how he is leveraging technology to make investing in assets simpler for India.
Wealth management career path
Coming from a middle-class family in Uttar Pradesh, India, it was only natural for my parents to declare, “Mera beta engineer Banega” (My son will become an engineer).
According to plan, I pursued a B. Tech. in Mechanical Engineering and started my career with HPCL (Hindustan Petroleum Corporation Limited).
After only a 2-month stint, I moved to Infosys as a software engineer. I was part of a team that was building an asset management solution for Bank of America.
I have always had a keen interest in investment and how markets and the economy work. Joining Infosys turned out to be a wise decision as I learned the intricacies of wealth management.
It urged me to opt for an MBA (Master of Business Administration) from the Indian Institute of Technology, Delhi. I specialised in Marketing and Finance. My academic knowledge of wealth management grew during my MBA.
In 2014, I finally got an opportunity to join ICICI Bank as a wealth manager. ICICI Bank is a leading private sector bank in India with a market capitalization of 6.08 trillion INR.
This was the first time in my career that my passion and profession went hand in hand. I got promoted to a senior manager within a year of joining. My career trajectory seemed fulfilling and exciting.
After two years, I felt the itch to get international exposure. I moved to Dubai, UAE, where I got to handle a global clientele and a gamut of global products.
In 2018, I returned to India and joined HDFC Bank Wealth division, an award-winning service offering a range of financial investment products. This was a turning point in my career.
Spotting an opportunity: appeasing the demand of rural India
I was doing very well in my career and I was promoted to Regional Head within 4 years.
At the bank, I was typically advising private, high-net-worth individuals on how to invest their portfolios and plan their finances to meet their financial goals, and they typically offer a range of services, including portfolio management, estate and retirement planning, and tax services.
Coming from a very small town, I was aware that the penetration of financial products into tier 3, and tier 4 cities were negligible. Every time I went back to my old place, people would ask me, “How to invest in a SIP (Systematic Investment Plan)?”
There was a demand, but no digital financial platforms were there to appease it.
Having been in the wealth management space for almost 10 years, I noticed how inefficient the industry was.
The processes are heavily dependent on manpower and one can handle only a certain number of clients, because of its manual nature. And the investment platforms that do provide these services are also not efficient. They are either transaction-only platforms or ones that advise you on how to invest.
Another limitation is catering most wealth managers only cater to people with a certain ticket size, i.e., 1 crore INR in assets. They are usually in their 40s.
Then what about people in their 20s who only have 10,000 INR to invest? They don’t know where to invest or how much to invest.
I was trying to figure out a way to leverage technology to solve these problems. That is why I decided to build a platform that considers all these factors and creates a wealth management platform for a wide range of customers. The idea of WealthyNivesh was born in 2021.
In Nov 2022, I finally took the leap and started my entrepreneurial journey.
We are automating the following functions:
- Gathering financial data
- Establishing financial goals
- Analyzing the portfolio
- Recommending a financial plan
- Implementing the plan
On our platform, we provide customized services for financial planning as well as investing. We try first to understand the customer’s requirements and cash flow and based on that, our system generates a solution.
Challenges in the way
We found some astonishing statistics while researching our digital wealth management platform.
The number of mutual fund investors in India is 3% of the entire population (roughly 40 million people). Whereas 8–9% of our population invests in crypto.
This just shows how untapped the market is. People find investing in mutual funds to be more complicated than crypto.
This is a challenge, and we are trying to reduce its complexity.
Another challenge that we would face is reaching out to retired clients. Since they are not tech-savvy, it would be difficult.
Other than that, we are more concerned about how fast we can execute and scale in this vast, untapped market.
What makes an excellent private banker/wealth manager?
Three crucial skills would be required in wealth management is:
- Ability to withstand pressure
- Interpersonal skills
- Market knowledge.
This job falls at the intersection of knowledge and skills. And the problem with the Indian education system is that a student only has academic knowledge or skills.
That is why there are only a few people in this space. It’s hard to find people with all three of the abovementioned traits.
Other than that, the essential skill sets you would need are the ability to grasp numbers, the ability to simplify the complexities of the market for your clients, and the desire to serve the clients.
India’s high net worth individual (HNI) population is expected to grow by 75% from 3.5 Lakhs in 2020 to 6.11 Lakhs in 2025. According to various reports, the Indian wealth tech market is projected to expand rapidly from roughly US$20 billion in 2020 to around US$63 billion in 2025. Some major wealth tech players in India; are Zerodha, Kuvera, Upstox, Groww, and INDWealth.
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