Copyright indiatimes
As venture-funded wealthtech firms expand their operations beyond metro cities, targeting new customer segments, the competition to hire relationship managers (RMs) and private bankers is intensifying. This is straining the limited talent pool in the sector and driving up operating costs in the wealth management segment, according to industry executives.The demand for experienced professionals is far outpacing supply, with firms aggressively poaching from banks, brokerages and traditional wealth managers, they said.In addition, many of these RMs are starting up as mutual fund distributors or personal wealth managers, resulting in a further strain on the talent pool.In some cases, compensation packages for RMs have surged 50-100% over the past six months as competition sharpens between legacy players and well-funded entrants, including the likes of Dezerv, Ionic Wealth and Centricity.ETtech Stockbroking firm Groww, in order to diversify from its core operations and enter the wealth management segment, recently acquired wealthtech platform Fisdom in a transaction valued at $140-160 million.“From conventional banks and NBFCs (non-banking finance companies) to stockbroking, fintech and wealthtech firms, and even large teams of experienced relationship managers who are now starting on their own, everyone is looking to hire people,” Srikanth Subramanian, CEO and cofounder of Ionic Wealth, told ET.“Since it was an industry which had a limited supply pool and limited players, it’s the same supply pool which is being attracted by all. Hence, it is giving this mirage of being a talent war and the price of recruitment has gone up. Once the dust settles, people will take position and recruit people who fit their bill,” he said.Ionic Wealth by Angel One currently employs about 80 relationship managers on its platform, while its peer Neo Wealth Management has around 75 and has plans to scale up to 100–125 over the next six-seven months.Large incumbents are also ramping up hiring, intensifying the talent squeeze. 360 One WAM (formerly IIFL Wealth) plans to add seven to 10 teams, or about 60–80 RMs, over the next 12-18 months.“We have a lot of exciting teams hopefully joining us over the next 3 to 9 months,” Karan Bhagat, managing director and CEO of 360 ONE WAM, said during the company’s latest quarterly earnings call. “I would be disappointed if we can't add seven to 10 teams over the next 12 to 18 months, which effectively would mean around 60 to 80 RMs.”The hiring surge also marks a strategic shift for digital-first wealthtech platforms that built their brands on technology but are now adding on-ground human touchpoints to engage wealthy and ultra-wealthy clients.Gurgaon-based Centricity recently brought on 30 senior private bankers to scale up its ultra-high-net-worth individual (ultra-HNI) vertical as it looks to expand beyond metros and strengthen its presence in smaller cities. The new hires come from companies such as UBS, Barclays, Kotak and ICICI Securities. The firm plans to double its private banking team by the end of this financial year.Similarly, Dezerv, which recently raised Rs 350 crore from the likes of Premji Invest and Accel, said it aims to hire nearly 200 RMs by the end of this fiscal.“As more millionaires and billionaires are made in India, that would mean that more wealth managers are required. But if we look broadly, the wealth manager ratio to the expected HNI and ultra HNI growth over the next four to five years shows a clear gap in relationship manager talent in the country. I believe this industry will continue to offer strong opportunities and ample space for new talent to enter and grow,” said Shajikumar Devakar, chief executive of Neo Wealth Management.Bhagat of 360 One WAM said the firm currently manages relationships with 4,000-4,500 families and aims to expand the base to around 10,000 families over the next three to four years. To support that growth, it will need 280-340 RMs, he said.For the second quarter of this fiscal, 360 One WAM recorded revenue of Rs 763 crore and net profit of Rs 316 crore.From a macroeconomic context, 360 One WAM noted that despite near-term volatility driven by global and geopolitical factors, India’s long-term growth outlook remains strong. Besides, the surge in domestic liquidity events, including more than 50 initial public offerings (IPOs) in the first half of this fiscal reinforced investor confidence and acted as a tailwind for wealth managers.Building the pipelineFirms expect the talent pool to gradually expand as they recruit from adjacent sectors such as mutual funds, investment banks and global capability centres, and invest in training fresh graduates. Neo Wealth has partnered with IIM Bombay to co-create a one-year wealth management course aimed at building a pipeline of trained professionals.According to a report by Goldman Sachs, India’s affluent population is likely to reach 100 million by 2027.Even retail-focused fintechs are now experimenting with on-ground presence. Saurabh Jain, founder of Bengaluru-based Stable Money, said the firm has begun pilot programmes in cities such as Kolkata, Chennai and Delhi, deploying wealth managers to assist customers in understanding the company’s offerings and resolving queries.“We now have people across Kolkata, Chennai and Delhi. These are the three locations where we are running pilots. Once we see success on these pilots, our idea is to go deeper,” said Jain.Globally too, wealth management firms and private banks are expanding their relationship manager base to meet increasing demand from affluent clients. UBS, after integrating Credit Suisse, has announced plans to strengthen its teams in several markets, as have HSBC and Standard Chartered.Tech as enablerHowever, global banks are also turning to technology to boost efficiency. JPMorgan Chase earlier this year said it had begun moderating headcount expansion as part of a plan to pivot toward leveraging artificial intelligence to support productivity and client servicing.“Technology plays a massive enabling role, both direct to the client and to the relationship manager,” said Sandeep Jethwani, cofounder and CEO of Dezerv. “The idea is to create an institutional memory of clients, help RMs deliver high-quality service in a timely way and improve governance to avoid even the chances of mis-selling.”
