About Ravi Nawal

New Wealth Managers in India- the Chartered Accountants !!

In an upcoming report titled – Trends in Indian Wealth Management Market, Celent analyzes the key emerging trends in the wealth management domain in the Indian market. The report captures all that is shaping the contours of this very interesting market place. One of the key discoveries is the growing trend of chartered accountants doubling up as wealth management consultants. This is a new phenomenon, where in small accountancy outfits are also doubling as point of sales of tax planning and savings instruments for clients. These products range in breadth from insurance to mutual funds. In larger cities accountants are also helping clients route investments into private equity and venture capital transactions. Manned by professional accountants with long standing relationships with their clients, smaller accountancy firms are only recently beginning to leverage their intimate understanding of their clients’ financials to advise them on suitability of different product classes for investments. This class has become active in advisory services in the wealth management domain recently. The wealth management offerings are positioned more in way of the traditional financial advisers. Accountants have emerged as an important intermediary in the wealth management business lately, charging commission income for products proffered and fee income for advisory services as their overall annual fee. Interesting how new channels are adding to the dynamism of the market place !!!

UCITS: Knocking on Asia’s Doors !

Undertakings for Collective Investments in Transferable Securities (UCITS) are investment schemes that allow for free cross border sales of instruments with a single authorization from any one of the Euro-zone member states. They have become tremendously popular in Europe. Off late UCITS are gaining in popularity with international investors.Today, Asia has the lion’s share of all internationally distributed UCITS. Hongkong, Singapore and Taiwan are emerging as hubs for the distribution of UCITS to the wider East, South East and Central Asia Region. Bahrain has become a pivotal center for UCITS distribution in West Asia and Africa.

Majority of investments finding their way into UCITS in Asia are routed into Equity (39%) , Money Market (23%) and Bond (20%) Funds. Most UCITS promoters I spoke to believe that though Asia will continue to be the biggest overseas geography for UCITS sales, challenges remain. These include – taxation issues, distribution complexity because of non-standard platforms , fragmented market and low automation levels. Will be interesting to see how distributors in Asia respond to this opportunity and how newer markets in Asia react to the UCITS offerings. Celent has just released a report on the subject: UCITS IV Directive: Implications for the Asset Management Industry in Europe.

Outsourcing in Indian Life Insurance Market

India’s domestic outsourcing market is gaining momentum. Most outsourcing service providers are turning inwards both to diversify risks and partake of the growing opportunity on home ground. Focus is now shifting from telecommunications and technology outsourcing to financial services outsourcing in the country. Of these, the Insurance BPO services market is expected to grow to USD 1.5 billion in size in the next three years- a substantial increase over its current USD 720 million size.Interesting to note here is that unlike their European & North American peers, Indian carriers are not driven by cost compulsions but rather are challenged by volume and manpower constraints resulting in the built-up of a favorable disposition towards outsourcing (See Image).

Carriers see vendors as partners providing best in breed knowledge and performance to enable them to focus on their growth objectives. Indian vendors and multinational vendors have only recently started catering to the outsourcing needs of the domestic market. With the increasing incidence of outsourcing in insurance sector, critical manpower base and know how specific to the Indian geography are also evolving at the vendor end. More firms are likely to realize profitability once the market acquires sufficient breadth and depth.

Celent recently published ‘Outsourcing Trends in Indian Life Insurance’ which captures the key issues and trends in the domain.