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54 INDIAN WEALTH MANAGEMENT - ISSUE 2, 2017
THOUGHT-LEADERSHIP
India grappling with ebb-and-flow
of falling fees, more clients
With plummeting fees within Indian wealth management becoming a concern locally,
the situation is attracting a worrying eye from practitioners. An exclusive Hubbis survey
of almost 100 top Indian wealth management professionals delved into the abyss.
A Hubbis survey of almost 100 leading
wealth management professionals in
India has shown that the dramatic de-
crease in fees in the sub-continent can
be directly linked to automation and a
continued client resistance to embracing
the fee-paid advice model.
However, some industry protagonists
believe solutions do exist to overcome
these setbacks.
When asked about a perceived lack of
fees transparency within Indian wealth
and asset management, almost 65% of
respondents agreed that this was the
case, this being tempered by the fact
that current regulations are in place to
monitor fees.
A significant portion of those surveyed
also held the view that most Indian
clients need more education of wealth
needs and products in order to get over
the hurdle of clients being unwilling to
pay for advice, which leads to a prefer-
ence for structured products.
This has led to fees in some cases being
reduced to 20 basis points or less, which
was anotherworrying point grappled by
the survey respondents with the major-
ity believing that this was self-defeating.
It was also thought that advisers should
stop competing on the parameters of
fees and start differentiating themselves
on the basis of quality advisory prac-
tices, turnkey solutions and structured
products and services.
However, a majority also said that
from the investor's perspective this
as going to be hard to change, and,
worryingly, they believed that this was
ultimately controlled by the investors,
who wishes would prevail with quality
being compromised.