Wealth Management Solutions for the HNW individuals - Kotak Bank
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Most investors perceive wealth management process to be a smooth ride. It is very different in reality, of course. Markets do not move in a straight direction and unexpected factors usually get in the way.

With an increase in the number of high net worth investors in recent years, there has been an increasing demand for sophisticated, integrated and front-to-back solutions. This is where the expertise of wealth management services can be put to use.

Wealth management is a continuous investment-advisory process that is a combination of financial planning, investment portfolio management and a number of aggregated financial services such as retail banking, estate planning vehicles, legal resources, tax professionals, business succession, stock-option planning, risk management, investment management and so on. It offers several strategies and plans that allow high net-worth individuals (HNIs) or companies to attain all possible goals in a systematic manner.

Wealth managers take advantage of their experience and knowledge to help the investors with their finances based on where they are in their life cycle and other surrounding factors. Below mentioned is a list of some of the solutions that every wealth management package should contain:

  • Financial Planning Comprehensive financial planning examines your financial health thoroughly to help you plan your investment goals through a roadmap for the future. This is ideally done to understand your complete financial situation before making investment recommendations. Some of the facets applied to your portfolio include expenses analysis, liability management, investment planning and wealth creation, retirement planning, insurance recommendation, contingency planning, tax advisory and so on. It helps you secure all your financial goals and needs like restructuring of loans, becoming debt-free, retirement, children’s education and marriage, tax optimization, etc.

  • Investment & Portfolio Management Portfolio management is the business of making customized decisions to build a strong portfolio based on your financial objectives or life goals, investment mix and policy, asset allocation, risk tolerance, concerns and time horizon. Two of the most common structures offered for the management of investment and portfolio include:
    • Advisory portfolio management services: As the name suggests, these services are limited to advisory level. Although you have access to the research data on the available opportunities and the expertise of the wealth manager, the execution and maintenance of the portfolio are your prerogatives.
    • Discretionary portfolio management services: These services go beyond just advisory. You are allotted a wealth manager who actively manages your portfolio on a regular basis and is the decision-maker (with your permission, of course) who alters your investments when deemed necessary.
  • Retirement Planning A financial plan and retirement plan work together with each other. A financial plan helps you prepare for the life you want to live during your working years, and a retirement plan helps you prepare for the life you want after you retire. Whether you’re already retired, nearing or still have a long way to go to, there is a complex challenge of outliving your savings. Therefore, retirement planning is a key financial objective that you must opt for. The planning should cover your present lifestyle, prolonged existence, inflation, asset allocation, withdrawal rate, healthcare and so on, to ensure that your income lasts throughout your lifetime.

  • Estate Planning Your estate is the combination of everything you own — your home and other real estate, current and savings accounts, investments, life insurance, car, furniture, personal possessions and so on. Estate planning fulfills your wishes by making a detailed plan of the division of your estate in advance (who, what, when, how and how much), amongst the ones you want to give after your demise. It protects your assets from going into the hands of unintended beneficiaries like your relatives, protects families with young children who are not ready to take the ownership and most importantly eliminates the family mess after your demise. However, estate planning is much more than just physical assets and also includes:
    • Name of the guardian and inheritance manager for minor children
    • Instructions for passing your values (religion, education, hard work etc.)
    • Instructions for your care if you become disabled before you die
    • Protection of the loved ones during unexpected and unfortunate events of their lives
    • Minimize taxes, court costs and unnecessary legal fees
  • Cash Management and Lending Having the availability of cash to do what you want and when you want, is one of the key deciding factors for the success of any individual or business. Cash management and lending facilities are some of the highly essential programs that most clients request as a part of their wealth management package. Cash management involves handling of a broad range of tasks including day-to-day finances, collection & handling, usage of cash, assessing liquidity, cash flow, investments and short-term investment strategies. The idea here is to eliminate surprises related to cash in a way that it maximizes the availability of cash in hand. On the other end, lending solutions ideally range from residential mortgages, unsecured loans and loans secured by marketable securities, hedge funds, private equity funds, commercial real estate and private jets, yachts, vineyards, ranches to art collections. The idea here is to enhance your liquidity and flexibility.

  • Risk Management A financial plan that includes wealth and risk management facilities, not only secures your vision for your future but also secures your family. Risk management is the forecasting and evaluation of financial risks along with measures to avoid or minimize the impact of financial and other losses that can have potential risks to your assets, business or health. It begins with assessing your risk tolerance with risk assessment tools. Your first line of defense here is identification of the sources of risk, then either avoid or minimize your exposure, and your last line of defense is insurance. It ensures that your income is sufficiently managed and debt obligations are met. Our wealth management solutions are tailored specifically to address various needs of yours to help you achieve your future goals. Click here to know more about our wealth management solutions.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.