Wednesday, January 9, 2008

SG Private Banking India's strategy

Considers itself as an investment bank for individuals. There are a large number of affluent individuals who are not being served by competitors. They present pool of potential clients. The growth pattern in India reflects SG's global development of private banking, in which Asia Pacific plays a key role. Offices are in New Delhi and Mumbai. Besides, there is a comprehensive IT operation in Bangalore.

Wealth management is a highly specialised service, covering all asset classes. Asset allocation helps determine an optimal mix of asset classes, ranging from equity, debt and real estate to alternatives. The latter may include `investments of passion' - even fine art and collectables - as well as structured products and hedge funds. Clients' life goals, time horizon and risk tolerance are three vital factors on this front.

There is a need for systems, which can provide a single view of a customer's entire portfolio with the wealth management services provider. There is a need for online financial planning tools. Clients are eager to be in control of their portfolios and are often active in selecting products in line with their asset allocation strategy. Overall, technology is beginning to play a more critical role.

According to one estimate, India has seen about 19 per cent growth in HNI population in 2005 vis-à-vis the world growth rate of 6.5 per cent. The fee structure here is yet to be developed and is currently accrued from brokerage fees and commissions on the services rendered.

Real estate and private equity are increasingly becoming important asset classes for high net worth individuals (HNIs). Though at a nascent stage, private equity in India is on the rise because of maturing financial sophistication. Secondary research highlights that in the developed markets, there is a growing conviction among HNIs that investments in fundamentally strong businesses are a very dependable wealth management strategy.

The time for private wealth management has arrived, feels Mr Sandeep Sharma, Head, SG Private Banking India. The latter, part of French financial services group Societe-Generale, is in the country since last December.


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