The Hindu Business Line : Private banking offers appropriate asset allocation: Societe Generale

Kolkata, July 31 It has been more than a year that SG Private Banking, the private wealth management arm of the French financial services group Societe Generale has launched onshore wealth management business in the country. “The market here is evolving rapidly”, notes Mr Sandeep Sharma, Head - Private Banking, India, SG Private Banking, adding clients are increasingly searching for superior services. He also dwells on the wares that private bankers may be expected to provide in the days ahead.

Excerpts

With investors turning smarter, what value-additions can private bankers offer them vis-À-vis retail banking? What factors induce Indian investors to avail themselves of private banking services?

Private bankers must ensure that they offer objective financial advice and personalised service. In India, the concept of “private banking” varies from financial product distribution to customising financial products for individuals. However, private banking in the real sense lies in acquiring a deep understanding of each client and his or her circumstances with a view to structure solutions based on such understanding.

The value-addition that private banking offers investors vis-À-vis retail banking is appropriate asset allocation. This is the process of determining an optimal mix of asset classes. These can range from equity and debt to real estate and alternative investments.

Additionally, there can be private equity, structured products, hedge funds and managed funds. Increasing incomes, shortage of time to manage one’s money, complexity of financial needs and the need for balance between spending patterns and achieving one’s financial objectives are leading to a demand of private banking services.

How can private bankers expand their products/services base? How is the market evolving?

Well, the scope for private banking is increasing. Private bankers can expand their offerings by introducing diverse investment products as and when the regulatory framework permits the same. There may also be newer services, including succession planning, philanthropy and trust services. The market is evolving very rapidly. Besides services, private banking outfits have begun focusing on technology. There is a need for systems, which provide a single view of the customer’s entire wealth portfolio. There is also a need for online financial planning tools to assist this segment of clients. The latter are typically eager to be in control of their portfolio and remain active in selecting their products.

How do you plan to differentiate your services?

SG Private Banking India’s wealth managers acquire a deep understanding of each client and his circumstances. Historically, Societe-Generale has been a global leader in structured products, derivatives and product innovation. We combine this core competence with our understanding of clients. We have also worked out micro marketing initiatives, including client-centric events, facilitating their participation in international forums such as the upcoming Forbes Global CEO Conference.

What sort of innovations can the market expect from private banking outfits in the days ahead?

Clients can expect innovations in terms of structuring of products. Besides, the market can also expect alternative investments such as private equity emerging as an important choice for high net worth individuals. In fact, though this is at a nascent stage, PE is surely on the rise.

Secondary research shows that in developed markets, there is a growing conviction among HNIs that investments in fundamentally strong businesses are a dependable wealth management strategy. Investing in PE focuses on this philosophy.

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