The Hindu Business Line : `Investors' mindset is actually changing in India'

WEALTH advisors all over the country are in demand like never before. Many of their clients, emboldened by an equity market that has rallied smartly, are questioning them closely about the finer points of investments.

The latest dynamics in the advisory space have led Mr Rajiv Bajaj, MD, Bajaj Capital, to wonder whether the men and the boys will soon be separated. Here, he addresses a few simple but pertinent issues.

Excerpts:

Are distributors really turning into wealth advisors? Or, is it just a fad?

As far as Bajaj Capital is concerned, we are trying to offer a far more complete range of services than before. By this we mean services that investors need but are just not able to get them everywhere. A distributor's task is well defined.

On the other hand, wealth advisory is much more than a mere furnishing of application forms and the other minute things that distribution has lately come to encompass.

Investors' mindset is actually changing in India, although raw data may not support this contention immediately. People are toying with bolder themes, perhaps in line with our society's espousal of new values at the cost of some of the earlier ones. The progress recorded by wealth management happens to be a function of these changes. It is here to stay.

How do you react to the suggestion that distributors should be regulated?

I agree. There is a case for regulation. Current legislation has no room for this.

On the mutual funds front, for instance, asset management companies are regulated by SEBI. These companies have a representative body set up from within their ranks. It meets the regulator and puts across its views to it.

Is the tendency to allocate more to equity prompted only by the general euphoria about stocks?

There is no denying that Indian stocks have seen the best two years. In the beginning, a section of people was indeed hopeful that the rally will sustain. They were not disappointed.

Some of them have been booking profits at regular intervals. I am sure a lot others became interested later when the market kept on moving up. It is not for us to suggest even remotely that the level will surely rise from here.

But allow me to say that investors, especially the high net worth ones, have started to look beyond equity. They are indulging in other critical aspects like real estate and art. The latter in fact looks set to occupy an even greater position. Art, people now realise, should form an important part of portfolios.

Is there merit in serving the mass market?

Well, we have been trying to move away from the concept of wealth management solely for the privileged classes. The masses do provide an opportunity, provided there is enough infrastructure to support the objective. Entering newer markets is possible if there are more points of presence and more personnel to tap the various customer segments that have materialised.

Are you attempting to capture the high-end of the market?

Yes. We have recently mounted a special drive to cater to high-end clientele. It has started in Mumbai under a separate brand name. The focus is on creating exclusive relationships.

I know a few other entities have worked out similar arrangements. All these are attempts to be in complete sync with customers.

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