Ashish Gumashta, CEO of Julius Baer Wealth Advisors (India), tells Citywire Asia what makes his high-net-worth Indian clients tick.

Q: What is the typical profile of your client?

A: Our clients in India are a mix of first- and second- generation entrepreneurs in traditional industries, as well as the owners of or professionals working for firms in developing sectors such as banking and technology.

Q: How has India’s private banking landscape changed in the past five years?

A: India is a country of entrepreneurs. We have more than 30 million small and medium- sized enterprises.

Historically, these entrepreneurs held the better part of their savings in physical assets such as real estate and gold, along with bank deposits. Over the past few years, however, global solutions have worked for our HNWI and UHNWI clientele.

Q: How is Julius Baer engaging with the fintech community in India?

A: Fintech related to payments, lending and wealth management is growing, while P2P (peer-to-peer) lending, blockchains and payment banks are still nascent.

Our platform is mostly made up of technology sourced from the local market. We work closely with fintech companies in Mumbai and Bangalore to identify new ways to analyse data touchpoints.

Q: How does your typical India-based client plan his or her wealth?

A: The business of private banking in India works mostly with relationship managers approaching clients and soliciting relationships with a reference.

Clients who have access to advisory-driven private banks typically follow a more disciplined approach to managing their wealth, in terms of following asset allocation, portfolio approach and portfolio rebalancing.

On the other hand, there are HNWIs who follow a distribution-driven model of wealth management and build their investment allocation based on the attractiveness of individual products, rather than taking an overall portfolio approach.

The most common investment avenues among HNWIs in India have been mutual funds (both equity and fixed income), direct equities, equity portfolio management schemes, bank deposits and physical real estate. Subsequent to the demonetisation drive in India, allocation to financial assets have significantly increased.

Q: What are some new asset classes and products they are looking at?

A: Given the strong performance of Indian equity markets in 2017, HNWIs will continue to allocate money to equities this year, albeit in a more cautious manner and with tempered return expectations.

Beyond that, following the rise in yields in the second half of 2017, investors are also attracted to fixed income mutual funds (including fixed maturity plans) and tax-free bonds. In addition to traditional asset classes such as equities and mutual funds, we find increasing appetite among HNWIs for other product segments such as structured products, long/short equity funds, hybrid or hedged equity fund strategies and structured debt funds.

There is also growing interest from clients in exploring investment options outside India, through the Liberalised Remittance Scheme route.

Q: How is succession planning typically done in Indian families?

A: In our experience, Indian families prefer to bequeath their wealth to their legal heirs only after their demise. Most of the clients prefer to leave their assets for the spouse, and after the demise of both husband and wife, assets are given to the children.

Succession is typically planned through a simple will. Clients who have young children or dependent family members plan their succession in a more structured way and consider setting up a trust for a seamless succession. Family business owners primarily
look at succession planning from ownership and management succession point of view. They also make use of family trusts to ensure that their fiscal (such as share ownership) and non-fiscal (such as voting rights) legacy is well planned.

Clients with non-resident beneficiaries consider global tax matters while doing succession planning. What’s more, we have
observed that discussions about succession are more reactive than proactive and largely initiated by a confidant or financial consultant.

Q: What are your expansion plans for India, looking ahead to 2020?

A: We have a strong domestic business, but we also have strong coverage of non-resident Indians (NRIs) around the world. India has become a key part of the group’s emerging market strategy.

We have a lot to build on, and the next phase of growth will entail developing the platform in India. This includes strengthening
our team of relationship managers, focusing on the new generation of entrepreneurs in India’s second-tier cities and towns and
strengthening our collaboration with our NRI team to offer global solutions to clients.

This article was published in the May issue of the Citywire Private Wealth magazine.