Aditya Gadge, chief executive of The Association of International Wealth Management of India, talks to this publication about the organisation’s recent rollout of its Certified International Wealth Manager certification in India.

Editor’s note: Aditya Gadge, who is chief executive of The Association of International Wealth Management of India, talks to this publication about the organisation’s recent rollout of its Certified International Wealth Manager (CIWM®) certification in India, highlighting the importance of continued developments in talent management for this industry. CIWM® is an advanced certification for the professionals working in the private wealth management sector, and is also useful for chartered accountants, lawyers and bankers. The certification is awarded by the Association of International Wealth Management.

What is the status of wealth management sector today in India?

Most of the leading global research houses, consultancies and financial services companies have been unequivocally predicting that India will have burgeoning wealth and wealth management opportunities in the years to come. This is as a result of the substantial growth in the number of HNW individuals over the past few years and especially because of the strong forecast growth in volumes and wealth in the next few years. However, the wealth management industry of today is marked by increasing competition and growing customer demands for transparency in a rapidly changing market. Increasing regulatory focus in the times of evolving fee structure and industry consolidation has made it imperative for the wealth management companies to outwit sectoral challenges with clever structuring of organisation, products and practices.

What are the challenges being faced by the wealth management sector in India?

First, it is very difficult to get clients and wealth advisors/wealth management companies to focus on the long-term and sustainable growth of the wealth management practice. This creates a vicious demand and supply cycle of short-term aspirations on the part of clients who are looking for instant gratification and advisors who are designing their products and services accordingly. Many advisors focus more on achieving their sales goals in search for commissions, instead of providing more thorough and client-centric financial advice.

Secondly, there is a serious shortage of qualified wealth management advice. Having interacted with a lot of senior leaders from the wealth management sectors of late, I am sure about one thing: that their major challenge today is to get the right talent: candidates whose aspirations and abilities are in sync with the organisation’s expectations and plans.

The Indian wealth management industry has been mostly about self-cannibalising when it comes to recruitments. An ironical “merry-go-round” of professionals changing employers at the drop of a hat is turning into an agonising spectacle for the clients.

Lastly, the major challenge for the industry is the lack of tight regulations. Different products are supervised by different regulators. On top of that the regulations mostly cover the institutions and leave out individual advisors. In light of these, the recently announced investment advisor regulations measures by SEBI and the Government’s plan to build more synergy among different regulatory bodies are positive steps ahead.

How are you planning to plug these gaps?

We plan to plug these gaps through our education programmes which are rich in technical content and high on relationship management skills and ethics. In addition to the CIWM® certification, we are also providing a lot of short-term training modules on related niche areas for the professionals.

There are not enough qualified wealth advisors at the moment. As a result, there is a lot of demand for new and experienced practitioners. So such training could help address the manpower issues the industry is facing.

AIWM India is also planning to organise a lot of events both in India and abroad to expose the Indian professionals to the world of international private banking. Our events will be a prolific learning and networking platform for one and all.

Lastly, we plan to work closely with the regulators and contribute to their learning and research initiatives.

What is the vision behind the association in India?

While it is clear that there will be an increasing number of wealthy people in India looking for private banking services, the question is: “Will the number of qualified wealth managers grow at an equal pace?” Private banking and wealth management is all about trust and service. It takes a private bank many, many decades to build up trust, but such trust can be destroyed overnight because of wrong advice.

AIWM India understands the need for skilled and ethical manpower for the wealth management industry to move forward.

Our vision is that AIWM India will become the most competitive and dynamic talent management partner for the private banking sector in India, broadly in two ways: first, by focusing on the pipeline of talent flowing into the industry; and secondly, by raising the capabilities of the existing professionals.

What is CIWM Certification?

The Certified International Wealth Manager is an advanced, internationally recognised education programme for experienced professionals in the wealth management industry. It is set at post-graduate level with a strong practical focus. The CIWM® training programme was developed in 2004 to meet the demands facing today’s private bankers, asset managers, trustees and other wealth owner advisors.

Developed by highly qualified academics and practitioners, the course skilfully combines theory and practice. It integrates the most recent results of research in new disciplines, such as behavioural finance and risk management, offering you the tools you need to occupy key positions in the world of private banking.

Exams

The exams are divided into three levels:

Foundation Level: The Foundation Examination is composed of three papers:

-- Paper 1 (length 190 minutes): Financial Accounting and Financial Statement Analysis, Corporate Finance, Equity Valuation and Analysis

-- Paper 2 (length 160 minutes): Economics, Fixed Income Valuation and Analysis

-- Paper 3 (length 190 minutes): Derivative Valuation and Analysis, Portfolio Management

The Foundation Examinations will contain multiple choice, calculation, mini-case study questions which assess the knowledge and analytical skills of candidates on the fundamentals of finance.

Final Level: The Final Examination is composed of two papers:

-- Paper 1 (length 180 minutes): Wealth Management

-- Paper 2 (length 180 minutes): Real Estate, Behavioural Finance, Relationship Management

National Level: The National Examination is composed of one paper:

-- Paper 1 (length min. 240 minutes): Domestic & International Wealth Planning, Taxation & Estate Planning, Regulations, Ethics and Wealth Products.

What makes CIWM certification different from the others?

Some of the key features of the CIWM® certification are:

1. Specialised curriculum in global wealth management.

2. Syllabus is a strong blend of four crucial subjects - Corporate Finance, Personal Finance, Law and Economics in addition to others like portfolio management and international wealth planning.

3. Exams are a combination of multiple-choice questions and open questions. This ensures that the candidate is thoroughly assessed both on his concepts and problem-solving skills.

4. Out of six exams, five are international (same exams conducted around the world on the same day) and only one exam is national (which varies from country to country). A candidate who wants to migrate to any other country and work in wealth management needs to give only the national exam in that country.

5. All the content has been designed by senior private bankers from around the world. It is reviewed every month and is updated twice a year.

6. Exams are designed and conducted by the parent body (AIWM, Switzerland) around the world thus ensuring that the standards are maintained and that the assessment mechanism is the same.

7. The content for the International Wealth Planning subject and the wealth management simulators have been designed by LawInContext (LIC). LIC is one of the world's leading financial and legal training companies. It is a part of one of the world's biggest law firms - Baker & McKenzie. It is a prominent training and content partner for some of the world’s biggest financial services organisation’s along with education bodies like CFA Institute (US).

8. Registration is valid for five years to provide flexibility for working professionals to give the exams only after meeting their professional commitments and fulfilling their training needs.

9. Certification is issued by AIWM, Switzerland and is valid around the globe.

Why should an Indian wealth manager pursue a Swiss certification programme?

Switzerland has always been the hub for private banking. The global private banking industry has AuM of $19.3 trillion. Offshore centres account for 42 per cent or $8.3 trillion of this total. Switzerland is the largest player in the international private banking space with AuM of more than $2.8 trillion.

The bulk (over 80 per cent) of funds held in Switzerland is held for foreign clients. Most of the world’s best private banks have been operating in Switzerland for decades and some for centuries. However let me clarify that CIWM is not merely a Swiss programme. It is a global program designed by AZEK, the training arm of Swiss Financial Analysts Association (SFAA). CIWM® certification beautifully encompasses the dynamics of different geographical regions and economics while staying true to its inherent character.

The content of CIWM certification is rich in its coverage of global topics and concepts – thanks to the contribution from AIWM affiliates from around the world.

In a profession that is in the process of becoming even more professional, do you think CIWM® certification can boost the earnings power of wealth managers the most?

The earnings-enhancing potential of different wealth management qualifications depends on the career path the individual seeks to take or ends up taking. Also the certification will add more value when combined with wealth management expertise, which is fleshed out from real client-handling experience. However, I do believe that CIWM® certification could ultimately prove more beneficial for individuals aiming to go into “top flight private banking”.

In terms of the technical skills required in this profession, CIWM® certification is the most spot-on in terms of the skill-set you can get and it is the most far-reaching in terms of the international wealth planning topics that it covers. Wealth management is fast evolving into a highly organised industry which needs highly trained people. CIWM® certification could thus be a key differentiator for an organisation, as this program has been designed by top wealth practitioners for practitioners.

HNI clients are more evolved, are highly educated and have mostly been around the world. For this clientele, a premier international qualification which will give the advisor a global outlook and enable him to communicate at an equal level, will definitely mean a lot. This acceptability then will percolate down to the firms who will be employing the CIWM certificate holders. But qualifications are just the start of a journey rather than the end.