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How wealth managers cater to India’s newly-rich tech entrepreneurs
If you’re looking for an informative, light-hearted read that investigates the mindset of the new-generation wealthy in India, combining Indian society, culture and myth in its investigation, it’s time to pick up The Wealth Wallahs.
Raizel Yu 20 Jul 2017

When one thinks of tech-entrepreneurs making millions, the founders of Amazon, Google, and Facebook from the United States, and Alibaba, Tencent, and Sina Weibo from China come to mind. In reality, countries around the world are cropping up millionaire tech-entrepreneurs at an astonishing pace. India is no exception to the tech-entrepreneur boom.

The informative, humorous and easy-to-read book published in 2016 by Shreyasi Singh, The Wealth Wallahs, compiles the attitudes to wealth of newly-rich Indians who are a part of this wave of wealthy tech-entrepreneurs. Singh’s book focuses on first-generation wealthy Indians, who were lower-middle class before their big break. The book examines their outlook towards wealth management, featuring IIFL Wealth Management as the go-to firm of the first-generation wealthy. These first-generation wealthy include the founders of TaxiForSure, Aprameya Radhakrishna and Raghunandan G, and the founders of Paytm, Vijay Sharma and Harinder Takhar, among others.

By the end of 2015, India had more billionaires than any other country aside from the US and China. A fall in wealth among Russians and the British allowed India’s richest to rank in the top three for the first time. India’s GDP has been growing rapidly. While it took over sixty years to reach a GDP of US$1 trillion, it took only eight years to double to US$2 trillion GDP in 2015. The reforming of the Companies Act in the early 1990s also dismissed the cap placed on CEO’s salaries, providing more growth opportunities for business owners and entrepreneurs

Singh devotes many pages exploring the cultural and social factors that influence the reservations and attitudes of these first-generation wealthy to their newfound affluence. She includes an excerpt from Devdutt Pattanaik’s The Success Sutra: An Indian Approach to Wealth, which emphasizes Hindu mythology’s caution against chasing wealth. India is a country with a huge lower class, a sizeable middle class, and a tiny upper class, with most of the traditionally wealthy individuals bearing a reputation of obtaining their wealth through immoral means. This old idea has led to a stigma against being labelled rich, and as such, through Singh’s interviews, there is a strange mix of mild denial and delusion and a certain discomfort at being called rich.

The changing landscape of client-advisor relationships in wealth management is also under the microscope. Before the 2008 stock market crash, wealth managers had much more discretionary power: clients did not demand the transparency and open collaboration that exists in today’s client-advisor culture.

In India, there are differences in the importance clients place on their relationships with their advisors across India. In Mumbai and Delhi, for example, clients can be attracted by a newcomer who proves to be smart and demonstrates value; whereas in Bengaluru and Pune, clients are hard to get because they tend to have a long-lasting relationship with their advisors that is relationship-oriented, rather than fee-driven.

Because the sources of income for the traditionally wealthy and for the new-generation wealthy differ, naturally, their outlook on asset managing differs as well. Singh contrasts the preferences and risk tolerances between the first-generation wealthy and the traditionally wealthy. With the self-made first-generation wealthy, whose wealth comes from having taken risks, they are more open minded, hands-on and risk-tolerant in their investments. The traditionally wealthy prefer preserving their wealth, while the new wealthy focus on growing their wealth.

If you’re looking for an informative, light-hearted read that investigates the mindset of the new-generation wealthy in India, combining Indian society, culture and myth in its investigation, it’s time to pick up The Wealth Wallahs.

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