Sutapa Banerjee of Ambit Capital looks at what it takes to service clients in a way which gives them something different and at the same time caters to their individual needs.
Date: Oct 2011
When it comes to returns, clients today don’t expect to make spectacular returns, she said, given the events of the last few years. As a result, most of her clients would like to see their capital preserved with a reasonable return over and above that.
She said she also has clients who have specific requests. For example, a client on the equities side has already allocated his longer term, larger-cap equity portfolio to another firm, so wanted to put a part of his growth, or risk, capital with her. This is an instance of a client whose expectations are higher, so she said she goes through the process of ensuring the client understands that the risks are higher, too.
For a typical client, in addition to their expectations regarding tangible returns, Banerjee said she also looks for a relationship manager (RM) who is able to understand their needs and reporting frequencies.
Successful client relationships
Banerjee said a client should be able to go through a particular cycle and see that the returns the firm has provided are consistent, and that it is adding value and acting in the client’s best interests, not trying to push products. This invariably takes time, she explained, anywhere from 12 to 18 months.
With all her clients, she said she would like, over a period of at two to three years, to increase the share of wallet to about 65% to 70%.
She said she would never try to get 90% of a client’s wallet because it doesn’t make sense. Even Banerjee’s best clients ask her who else they should consider as another wealth adviser, which means they trust her sufficiently to take her opinion.
Different types of clients
In terms of the owner-promoter segment, these are typically people with investible surpluses from having earned out of investments in their company, said Banerjee, adding that there is also a group of people who have consistently been investing only into their company, which tends to be a family-run business.
Where a client has sold their entire business, or divested their stake, and suddenly has a large chunk of money, Banerjee said that while they may seek further business opportunities in the future, for the time being they have surplus money which needs to be managed.
Given they’ve not been in that situation before, she said they get approached by many wealth managers, assuming the transaction is in the public domain, or the clients prefer to get advice from multiple entities because there is some skepticism when trying to get it from one or two firms only.
Ambit’s unique offering
Because of the corporate finance linkage that Ambit has, Banerjee said the firm sometimes gets access to fundraising deals which the corporate finance side of the business doesn’t take on because the amounts may be smaller.
For example, in a deal of perhaps US$8 million to US$10 million equivalent, the firm’s private wealth group might take this on for a set of clients and also put in some of its own money – which she said means the firm does considerable due diligence.
Some of these deals are not what a typical wealth adviser in the Indian context can take to the market, she explained, so they make Ambit unique.