To weather the storms in the latest pandemic, wealth advisors need to adjust their model and focus on client
engagement, argues Atul Singh, CEO and founder of Validus Wealth.
India's Validus Wealth: Our first port of call during COVID-19 is increased client engagement
To weather the storms in the latest pandemic, wealth advisors need to adjust their model and focus on client engagement, argues Atul Singh, CEO and founder of Validus Wealth,
Looking back on his firm’s experience since the outbreak of the COVID-19 pandemic, Singh told Asian Private Banker: “There are many positives that we will take forward from the last two months and bring into our business model — which was heavily tested over the period.”
He admitted having been busier than ever as client discussions have been moved online and proved less restricted by the clients’ physical locations. Over the past few months, Validus prioritised client engagement instead of the revenue of the business, which was “up several forts”. “All we did was make sure that the RMs understand the clients’ portfolios and refrain from relentless product pushing,” he said, adding that such engagement has reinforced the company’s advisory model and put the business in a stronger position..
Context-dependent conversations According to Singh, the clients were experiencing what he called a “negative wealth effect”, as their business was hit inevitably, their risk appetite has come down significantly. "Clients need to be responded to for dealing with the right balance, between risk taking and capital preservation,” Singh explained.
One hand, it is about their financial well-being: Are the assumptions that we made about our future about lifestyle retirement planning, succession planning, and action planning. “On the other hand, as an analyst, what we can do is to put our energy in thinking about which industries, sectors, companies have been more resilient during the pandemic or sustained less economic damage, and which will recover at a faster rate, when things normalise. "This means that how the clients approach their investments will not be the same. Their portfolios need refreshing and rebalancing for positions on companies or asset classes that will recover rapidly. As you can imagine, this type of conversation is not product pushing, but very solution and context-dependent” Singh said.
Offshore diversification Singh said, his firm is recommending that clients consider offshore diversification. “One thing that was very clear to us through this crisis is that the US dollar is still the currency of the world. So we are asking our clients to diversifyat least from a currency perspective.”He believed that Indian families’ assets were not globalised enough. “While Indian currency has done relativelybetter during this crisis, some of the other emerging market currencies have fallen drastically, The client can sustainsignificant damage from an event like this, if their assets are not diversified across markets and currencies.”“In terms of diversifying offshore, we not only look at various partners but also think of ways to simplify ouroffering. An Indian investor does not look at investing into the offshore market in the same way as a Hong Kong orSingaporean investor does.”
Singh emphasised the need for wealth advisors to “significantly cut down the level of complexity of an investment” for Indian investors as they may be less familiar with certain markets or products. “We feel we are in a good position as we understand the nuances in this regard,” he asserted with confidence.LGT Group in 2019 acquired a majority stake in the Mumbai-based firm — once known as WGC Wealth. Validus Wealth is currently headed by Singh, an ex-Julius Baer India Managing Director and CEO.