As of FY25, there are 8.5 lakh High-net-worth Individuals with significant wealth that need careful management. If you are one of them, you must learn about wealth managers and their services, roles, etc., that might help you grow and become financially successful. 

An Overview of Wealth Managers to Grow Your Wealth 

Before learning about wealth managers, you must have a quick look at what is wealth management. It is a strategy that helps make informed investment decisions, plan your finances for a secure future, and do tax planning, etc.  

As a certified financial expert, wealth managers offer such wealth management services and here is how they help grow wealth:

• The ideal consumer of wealth management services is high-net-worth individuals who have a significant amount of assets. In India, those who have an asset value of more than INR 5 crore are considered HNIs. 
• If you fall under the HNI category, they will first assess your financial background and your earning sources. They will look into other factors such as your financial goals, investment horizons, and risk appetite.
• Suppose you are keen on investment in the share market, ready to take risks and want to invest a capital of INR 10 lakh. A wealth manager might suggest investing INR 7 lakh in equities (for potential high return), INR 2 lakh in debt and INR 1 lakh in a Fixed Deposit. 
• Now, suppose you are looking for safe investments and prioritise your post-retirement life, a wealth manager might suggest investing INR 3 lakh in equities, INR 5 lakh in debt and INR 2 lakh in FDs. 
• They also find tax-saving avenues, retirement schemes, plans for alternative investments, succession, etc.

Detailed Services of Wealth Managers to Ensure Financial Success

As an HNI, you might wonder why you shouldn't hire an asset manager, since they also help grow your wealth. However, there is a key difference between asset management and wealth management.

The former stays more focused on managing portfolios and making informed investment decisions. While the latter covers a wide range of services, including investment decisions as follows:

• Craft Investment Strategy and Manage Portfolio

Based on the risk appetite, financial goals, etc., they curate and offer you a tailored investment strategy:

• For risk-taking HNIS, they might create portfolios that are more exposed to high-risk assets such as direct equities. 
• For conservative investors, they might create investment strategies emphasising fixed securities like government and corporate bonds, etc. 
• They keep monitoring your investment portfolio and, based on market movements and other factors, they rebalance it. 
• Suppose your portfolio is 70% equity, 20% debt, and 10% FD, and a fall in equity shifts the allocation. Your wealth manager might sell some debt investments and use the proceeds they buy equity, restoring the original 70-20-10 mix.

• Portfolio Diversification

A recent survey says that about 40% of HNI investors are facing low returns on investments.  One of the common reasons might be the lack of proper diversification that overexposes them to certain assets. 

A wealth manager helps with portfolio diversification by identifying emerging sectors or industries and more:

• Sectors like healthcare, renewable energy, pharmaceuticals, etc, are showing a potential growth in India between 12% and 20%. A wealth manager might invest in such industries beforehand for a potential optimised return. 
• As of FY25, there are 5.20 crore mutual fund investors in India, which might be a safer investment option than direct equity investments. Thus, a wealth manager might also invest in equity or debt, or Funds of Funds, to cushion against risks. 

• Other Wealth Management Services

A wealth manager charges a bit higher, up to 2% of the entire wealth, to provide such a wide range of services, including the following:

• The highest income tax rate in India is 30% and surcharges apply if your annual income is INR 50 lakh. A wealth manager might find tax-saving investment options to reduce your tax burden.
• They also advise on Alternative Investment Fund investments, such as in private equities, real estate, etc.
• They plan for your retirement and keep aside funds for your children's education. Also, they help with succession planning for a smooth transition of wealth down the generations. 

Conclusion

A wealth manager can provide an end-to-end financial solution, i.e. making informed investment decisions for retirement, succession, wealth planning, etc. Such professionals are suitable for HNIs as they are effective for managing and growing significant wealth.