What a time to be a private client. In a tri-polar world of European stagnation, an uncertain US recovery and fear of a Chinese slowdown, these markets are proving difficult to navigate even for the most savvy investors. If this wasn’t tough enough, getting hold of your relationship manager may be proving a little difficult – fair-weather bankers are a common problem in our industry.
So how are Indian private clients coping? Well, whether they are in London, Nairobi, Dubai, or Mumbai, the typical Indian client tends to be a sophisticated investor – self-directed, always vigilant for that profitable trade in any market conditions and keen to get exposure to the Indian currency or credit markets. These basic characteristics have not changed, which make Indian clients a very valuable demographic for most institutions. In recent years, however, an interesting and important theme has begun to emerge. An increase in personal and corporate wealth has meant that many Indian entrepreneurs are now looking for direct investment opportunities in real operating businesses globally or the chance to develop their own businesses outside their traditional market places where growth has stalled or declined.
And it is in this search for new investment and market opportunities that private banks and private bankers covering Indian clients have a real role to play, given the breadth and success of the Indian Diaspora to which they are connected. With many small to medium enterprises (run by Indians themselves) being shut out of traditional sources of finance, wealthy Indian private clients can play a proactive role in getting the real economy restarted. These naturally symbiotic relationships are success stories waiting to happen.
Private bankers should have an intimate knowledge of their clients’ businesses as part of their responsibility of truly knowing your client. In reality, however, few bankers are able to connect clients to each other or to real business opportunities. Many bankers become responsible for too many relationships and are therefore unable to truly understand and identify potential synergies in the underlying client base.
Furthermore, bankers by nature are solitary creatures – reticent to share client information with other bankers, thus further limiting the opportunity for connecting supply and demand.
Bankers simply need to become better educated and informed. They must develop an understanding of trade patterns between the UK, East Africa, UAE, and India and to this I would probably now add Singapore and Nigeria. Many private wealth organisations now have some form of investment club to bring clients and opportunities together quickly. But in order for these initiatives to be successful, private bankers need to firstly simply better understand their clients and, secondly, recognise that their role and responsibility as a true adviser in these markets must go beyond what seemed acceptable a decade ago.
Just as Facebook has become the vehicle for social networking, private banks should become the vehicle for true entrepreneurial networking – bringing together opportunities, investors, intellectual acumen and capital.
Sonjoy Phukan is a Managing Director at Signia Wealth – a wealth management boutique specialising in strategic wealth management for individuals, families and trusts. His focus is on developing the firm’s client base and capabilities across the Indian subcontinent, and Asia Pacific at large. Phukan’s private banking experience spans across Barclays Wealth and Goldman Sachs in the past.