Why is it important to choose your wealth management firm wisely?

Wealth management is a term that is used very frequently. I am sure you must have heard about wealth management from ample sources such as board-meetings, finance and trade articles and of course, through financial advisors. Yet, the real definition of wealth management, in a way, does remain a little ambiguous. Reason? Because wealth management is viewed differently by different people, depending on which end they stand. For an investor seeking advice from the one of the topmost wealth management firms, wealth management is the process of enhancing or tackling their own or their business’s financial situation. Whereas from the point of view of a wealth manager or financial advisor, wealth management is the ability of herself/himself or their team to provide a wide range of financial services to their affluent customers, willing to invest in assets that will help them upscale their wealth through their consultation.

The role and responsibility of a wealth manager has many folds to it. It is not limited to just advising their clients on financial services and products available. They have a huge responsibility of directing the funds of their clients in the right direction, managing their client’s investments in this way. Plus, they also equip their clients by providing them credit solutions, which is important in running a business with high credibility. In addition to this, the wealth management firms also provide tax and estate planning service to their customers.

Wealth managers play a very important role in the client’s journey to enhancing their client’s wealth strength and financial portfolio. A competent and a dedicated wealth manager has the ability to turn around the face of a business or someone’s personal financial portfolio through rightly timed decisions by recognizing the underlying opportunities of various financial products. To put it in simple terms, the wealth manager has the ability to make or break and person’s financial portfolio. Hence, it is important that they are chosen wisely.  

Role of investment banking and ESG funds in India

Investment banking is a term we are all familiar with. From time to time, we must have read this term in the newspapers, heard on news channels or simply must have heard on some TV show. But what exactly is investment banking? Investment banking, in simple terms is the process of raising funds and capital for clients that can either be big corporates or government sector institutions, and some other entities too. Their primary functions include aiding their clients in underwriting new debt, selling securities and also help in facilitating mergers and acquisitions. Along with this, they are also involved in reorganizations for private sector investors and some institutions as well. Another very important function of the investment banks is helping and guiding firms (the bigger ones) with investment in ESG funds in India, or wherever they might be. ESG funds are the kind of funds that tells potential investors about a company’s position and credibility through their investments in environmental, social and governance factors. The major focus is on those businesses that resort to having environment-friendly conduct, deliver services or products that have a positive impact on the society and give a great importance to ethical business conduct.

So why exactly is ESG funds in India or anywhere else important today? To put it in simpler words, it is a belief that companies would invest in ESG only when there is some pressure from bigger and larger investors, who have the power to hold them accountable for their environmental, social and governance ethics. Plus, we cannot rule out the fact that in today’s world, any business that could potentially harm the climate, societal beliefs, and governance conduct can be a greater risk for any business and hence, the investors too. Those companies that follow the ESG guidelines and norm are always in safe zone in terms of losses with reference to the above-mentioned factors.

What functions do investment banking firms perform?

At some or the other time, we have all heard about investment banking. But what does investment banking really mean? We shall find out today. Investment banking is that branch of banking operations that provides aid to organizations and even individuals in order to raise capital. Along with that, the investment banker appointed also provides them with detailed financial consultancy as well.

As a field in the banking universe, investment banking is known to be as one of the most complicated financial systems. Be it investment banking firms in India or anywhere in the world, all these firms provide a wide array of service. Their role in helping their clients is in more than one way. Along with that, the type of clients they deal with are also different. Investment banking firms provide services such as trading securities or proprietary, assisting and overlooking mergers and acquisitions that they clients might be dealing with (usually work as advisory), lend money to firm in need so as to enable them in purchasing assets and also settle some liabilities, help businesses in restructuring making them more business efficient and ultimately, helping businesses or their individual clients make more profit. They also help private businesses in going public.

Most investment banks also provide the wealth management service. Wealth management in this century has become a wholesome concept, where it is no more about investing money in assets that were deemed to be safe earlier such as fixed deposits or property. While property is still one of the most valuable of assets, it does not provide liquidity. When investing your money to gain profits, it is important that the money is divided across different kinds of assets, those who have good liquidity and others that are stable. Risk factors also need to be taken into consideration on the above two types.

Why choosing a good asset management company is important?

If you consult with any of the top asset management companies in India today, you are bound to here many stories of investors’ panic selling when the market goes down and also of those investors that kept their patience at the time of crisis, did not sell their shares which also formed a major part of their assets, and reaped high benefits over a period of time. The difference between these types of investors is not just about their patience, but also the type of guidance that they have been receiving from their asset or wealth manager. Time and again, it has been said that market being down is an opportunity for investors to invest more (as the shares are cheaper) so that they can enjoy the gains at a later stage. However, unfortunately, some wealth managers fail to make their clients, the investors, understand this. Ultimately, the investor looses out on the profits that he or she would have gained only if they would have been guided and explained the meaning of remaining steady, properly. This brings us to the main point of this blog, the importance of having a good wealth manager. A wealth manager is not someone who you just hire so that they manage your wealth for you and ultimately give you good fruits. A wealth manager is more than just your wealth guide. For a wealth manager to churn our good results for your wealth, you need to trust them. But all this comes only after verifying that the wealth manager has produced good results for other clients in the past. Be it about long short funds in India, different types of mutual funds or any other financial portfolios, the wealth manager should explain the investors benefits and cons of each type of investment and lead them to a better progress and profit.