HNIs want to move into a more holistic solution approach: Anand Rathi

Anand Rathi and Amit Rathi of Anand Rathi Wealth in conversation with ET NOW. The company debuted on Dalal Street today.


What does the listing mean to you, especially the kind of listing that you have seen when so much was said about the primary markets getting the valuations right or being punished?

Anand Rathi: This is a very, very fast expanding business. The number of billionaires in India is growing very fast. Every three-four years, the numbers are doubling and we have seen huge growth coming in. We also have a tremendous advantage in terms of our philosophy. We have created a good segmentation of Rs 5 crore to Rs 50 crore clients and they have been very happy with our work. I believe that the growth potential of this business is very good and I am sure our shareholders will reap good results in years to come.

What is your outlook for the markets in 2022?

Amit Rathi: In the last 5-7 years, HNIs have largely gravitated towards financial assets a lot more, especially equities. I do not think that trend will change in 2022. Markets are looking strong. They have been supportive as the profitability is strong. The Covid environment will create volatility. The fear of inflation globally might create volatility but generally, the market outlook is reasonably strong. So the client allocation towards long-term growth assets like equities should remain strong and we do not see asset allocation changing. Real estate, which was a big structural component of client portfolio seven-eight years ago, has come off and now real estate investment is more consumption oriented rather than investment oriented for clients. That is the structural trend that has been in play for the last six-seven years and we see that trend continuing.

What the markets will also want to know is how you are going to go about with private wealth management. So many changes have taken place thanks to tech. Going forward, how is private wealth management about to change?
Anand Rathi: The outlook of the millionaires and people who have a lot of wealth is gradually undergoing a change and they want to move into a more holistic solution approach rather than product wise selection approach because people have realised that the holistic approach has given much better advantages without too much of pressure. Day to day things are to be done and therefore gradually this change will keep on coming and people will realise that a portfolio approach is better where holistic advice is available to them and that is where our strength really lies.

We have been really able to develop a philosophy where people can look at holistically and we can advise them and people have made very good returns in this philosophy. So I think more of that change will happen in years to come.

What kind of new tech enabled products can we expect from you? Building on that, have HNIs been taking to any new asset classes?

Amit Rathi: Generally after every year or two, there is a flavour of the season product. US equities were attracting a lot of money. Then there was crypto and also in pre IPO tech companies in India, there has been a fair bit of interest. But as far as Anand Rathi is concerned, our focus has been on the client’s goal and to find the simplest way of getting there. So far, we have seen that mutual funds and market linked debentures which are fully liquid products, are able to get customers to their goal. So, we have not had to look at some of the other opportunities because they come with their own risk.

If you are chasing a flavour, that flavour might change next year and those risks remain. We have focussed on long-term asset allocation and simpler products in the customer portfolio. As far as tech is concerned, we have made very aggressive tech investments in the last few years. We have got two fintech subsidiaries; one a digital wealth which is a Robo adviser for the mass affluent which is one level just below high networth individuals.

We have another company called OFA which is the biggest tech platform on IFA. On IFA, it is a SaaS platform. It is the biggest in the country right now with over 5,000 IFAs and in the private wealth space, the use of technology to enhance client experience, online execution, reporting, servicing and all of that. But increasing RN capability to enhance customer experience and customer advise, how do we make it more instantaneous, more rapid and more customised to each or more timely for each individual? There is a lot of investment in technology that we have made in the last three, four years and we will continue to make going forward.