Financial markets continue to surprise even the most experienced investor. In March, when the Covid-19 pandemic struck, equity markets dropped by 25-30 per cent, while debt markets yields shot up. After hitting lows on March 23, equities recovered quite a bit of ground. Gold, all the while, has inched up and entered uncharted territories. It becomes clear that hand-holding and good advice is the need of the hour for investors given the movements of different asset classes. At times of high volatility, the job of an advisor is to reassure investors. During good times, the advisor has the task of curbing the exuberance displayed by the investors and reminds them of financial goals, risk appetite. Investors are beginning to acknowledge the role of external advice. In this week's Finapolis Conversation, Saurav Basu, Head of Wealth Management, Tata Capital, tells Kumar Shankar Roy how financial advisory is definitely more valued today. Basu, who previously spent more than a decade and half at Citi, also sheds light on how wealth management function at Tata Capital is using digital as a strategy to grow business and serve customers. Read on to know more.
How has the market for sophisticated products like AIF, PMS developed in India? What is Tata Capital Wealth Management USP, and how are you giving a superior investor experience?
Our endeavour is to help our customers achieve their financial goals. Wealth Management for us at Tata Capital is all about understanding the customer’s financial needs, enabling them to identify their short-term and long-term goals and then crafting a plan. Our ability lies in having a deeper understanding of financial planning, our comprehensive suite of financial products and services, a team that is dedicated and highly qualified and how we leverage technology to give our customers a truly simple, effortless and seamless experience to money management. To answer your question on how AIFs and PMS are performing, I will go back to how we plan our customer’s financial plan. Based on our customer’s financial goals, PMS/ AIFs become a part of the plan. There has been a good appetite for our PMS / AIF product offerings so far.
With volatile markets and asset class movements, is financial advisory being more appreciated today?
Yes, I would definitely say so. We have been very closely working with all our clients and ensuring that the right guidance and products advice are recommended to clients to meet their investment goals. We have been reassuring each one of them and hand-holding them in these volatile times to ensure that the clients don’t redeem in panic and also helping them to invest in the right asset class in case of investible surplus available.
The investment strategy by Tata Capital’s wealth management team is always based on a fundamental approach towards one’s risk appetite, financial milestones , assessing one’s short term liquidity goals and so on. So, yes, financial advisory is definitely more valued and appreciated today by clients due to the uncertainties prevailing.
The world is passing through a difficult time due to Covid-19. At such times, what are you telling investors to stay calm?
Surely, the ongoing pandemic has caused anxiety, we on our part, keep engaging with our customers and reassuring them, that their investment strategy was based on all important parameters of financial planning i.e. risk appetite, long/short-term goals, thorough research, diversification of assets and so on. Each of our investment plans is devised such that it doesn't chase volatile short term profits. In fact, our investment plans are planned in such a manner that it is resilient enough to weather the storm.
After touching lows in March, stock markets have risen smartly. After staying cautious for a while, many investors are now experiencing FOMO - fear of missing out. Should investors put money in investments today?
The Covid pandemic has clearly caused the markets to behave volatile. There will be ups and downs, but our approach would not be to react to each high and each low. The pandemic, in its own way, teaches us to be patient, to be consistent and not to over react.
At Tata Capital’s wealth management, we recommend investors to not get carried away by the volatility on either side, but instead invest continuously across asset classes, stay diversified, and ensure that the risk of various products are well understood by the clients . FOMO has no place in our scheme of activities. In fact, we encourage our customers to invest regularly, especially our new -to -investment category of customers.
Tata Capital Wealth Management has embarked on a strong digital journey. How are you using digital as a strategy to grow business and serve customers?
So, at Tata Capital, we have invested in creating a strong digital culture across all our businesses which includes the wealth management business as well. We have recently launched our very App, called Moneyfy. This smart and simple Do- it- Yourself App provides an array of wealth management services such as carrying out investments, assisting financial goals, buying insurance and loans. The Moneyfy application makes managing money and planning for goals seamless and convenient.
Based on each customer’s defined parameters and goals, the App’s advanced algorithm curates financial plans which suit his/her investment style. Customers can also set up their own goals such as buying a new home, saving for a new car or planning a holiday overseas and the app enables them to choose relevant investment options. Moneyfy provides easy access to the most frequently needed financial products including: Mutual funds, Insurance Plans and Tata Capital Loan Offerings.
India is a developing economy. We have a large population of youngsters. Are youngsters today using open to taking risk? Do they understand wealth creation and are they patient enough?
India’s youngsters today are way more financially evolved than what their peers were. India’s millennial and GenZ-ers are well aware of the financing and investment options available to them and which ones best suit their financial goals. Infact, as per Tata Capital’s Millennial Pivot, 66 per cent of Gen Z is financially matured in terms of investment options and would exercise those instead of bank deposits to meet their long term financial goals. Further, around 60 per cent of Gen Z turn to influencers, banks and financial institutions for financial investment advice. Thus proving that they are open to taking calculated financial risks to maximize their savings and investments.