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Hubbis connects people in the wealth management industry to one another

BFSI Industry Interview

On: Feb 9, 2014 | Duration: 1.00 hrs | From: Hansi Mehrotra
BFSI Industry Interview in Advisorkhoj - Hubbis connects people in the wealth management industry to one another

Hansi is a partner and the managing director of Hubbis in India. Hubbis is a leading provider of content and online training for the wealth management industry in Asia.

Hansi has 20 years experience in the financial services industry in Asia Pacific. She was head of wealth management for Mercer's Investment Consulting business in Asia Pacific based in Singapore, having started the firm's wealth management services business in Australia in 2003.

Before Mercer, Hansi was Associate Director and head of retail at a leading Australian research firm, van Eyk, where in addition to being responsible for sales and research, she developed online research tools for financial advisers and retail investors. She started her financial services career as a financial adviser in Australia specialising in ethical investments in 1993.

Hansi holds a Bachelor of Arts degree from Delhi University, a Graduate Diploma in Applied Finance and Investments and the Chartered Financial Analyst charter from the CFA Institute. She has also completed a Private Wealth Management Program at Wharton, University of Pennsylvania.

Hubbis claims to be the specialist in providing quality content and training online to market practitioners across Asia in Wealth Management profession. Can you please elaborate more what exactly Hubbis is all about?

Hubbis connects people in the wealth management industry to one another and to other stakeholders such as product and service providers through content driven portal, publications and events. All of these are designed specifically for the wealth management practitioner, who in the broadest sense, is any intermediary who talks about a financial product to an individual client, be it an IFA, or a private or priority banker.

Through our portal, events and publications, we provide informal or continuing education. In Asia we also have a formal education service through our eLearning portal, where we provide modules on a variety of technical, compliance and soft skills topics, with assessments and reporting. Practitioners can use it for once off learning or ongoing learning. We would like some IFAs to trial this for India.

We are also working on an entry level course for the industry, which will be a combination of hard copy and online videos. That course would be ideal for IFAs.

How long Hubbis is in India and what is your experience so far?

Hubbis launched in 2010 in Hong Kong, and started sending newsletters to practitioners in India in 2011. We also did our first event in India in 2011. But the Indian entity was formally set up in 2013.

Our experience in India has been great. While we hold events in a number of developing markets, the engagement levels at our events are amongst the highest in India. We have separate edition of our annual guide only for the Indian market. We are keen to launch our formal education offer here.

As I mentioned, we would also like to offer our eLearning portal, and our new course to IFAs when ready.

Is the content free for Investment professionals or you charge for this?

The content on our site, publications and events is free for wealth management practitioners.

The eLearning portal will also be available for free for some modules for a period of time.

When the course is ready, there will be a cost but quite affordable.

Do you also run some professional courses for empowering the investment professionals in India or at any other place in Asia? Are they recognised by the regulators or SROs of the respective countries?

As I mentioned, we have an eLearning portal with a proper Learning Management System (LMS). We have more than 70 banks and IFA firms in Asia which manage their L&D function through this portal. They complete their ongoing regulatory continuing professional development requirements through the portal.

We will also be offering our entry level course, offline with some online components. We have run the syllabus past the industry through the Asian Wealth Management Association. Once the course material is ready, we will also run this past the industry to ensure it is practical and effective. Then we can check with regulators about recognition.

India is more about product selling through retails IFAs and has limited number of licensed and certified financial advisors. Is Hubbis helping both these categories or focused toward the premium segment of the advisory market – wealth managers, family offices, CFPs and CFAs?

Let me clarify – we use the term wealth management, and therefore wealth manager, in the broadest sense of the term. It includes IFAs and financial planners, as well as banks and national distributors i.e. across organisation type. And those serving mass/affluent and high net worth segments ie across client segment types. And those who get paid by commission or fee for service i.e. business model type.

So our content and learning services are aimed as much at IFAs as they are for private bankers – some content is common, some we clearly segment, like our conferences.

Hansi, you worked and practiced as a financial professional in Australia and then in Singapore and Now in India although in a different avatar, what’s your experience across these places and how evolved are these three markets? And also how differently financial advisory is practised in these places?

The differences are a function of maturity. In some respects, India is going through what Australia went through 20 years ago when I first entered that industry. In other respects, like regulation, India is trying to catch up and sometimes lead other markets. Singapore and Hong Kong have the additional characteristic of being wealth hubs, like Switzerland has been in the past, which Australia and India don’t have.

Australia is ahead of Singapore/HK in terms of separation of roles. As an example, Australia merged the regulatory functions across financial products a long time ago, so there is no regulatory arbitrage. They also separated the insurance and investment products, so people are clear that they go to insurance companies for term insurance and annuity products where risk has to be pooled and statutory reserves have to be maintained. And they go to asset management companies for investment products. Even insurance companies and pension funds go to asset management companies to manage their reserves.

Another example is the role of platforms. Platforms act like a 'wrapper' across a portfolio of wholesale funds. The clients pay an ongoing cost at the platform level, which then gets divided into investment costs, administration costs and advice costs.

This is a longer discussion - I would be happy to share at a forum.

From your experience, can you tell us whether the Investors are willing to pay a ‘fee’ to their financial advisors in Australia or Singapore? If yes, then what are the criteria for that payment and what clients expect out of it?

Yes, clients are more willing to pay a fee for service in Australia. However, even there, the majority of income for financial advisors is through an ongoing trail, albeit from the platform rather than individual funds. For that, advisors have to review and monitor the portfolio and client circumstances on an ongoing basis.

Penetration of financial services business in India is abysmally low. Some figures show it is lower than 10%. What, in your opinion is lacking here, what are the root causes?

In my opinion, there are some structural issues and some self-inflicted issues.

When working with the PFRDA on the NPS, I realised the structural problem with trying to convince the 'unorganised' working sector to lock up their savings and invest it in capital markets. Unlike Australia, India can’t make it mandatory or offer tax incentives to people who don’t have regular trackable income, nor pay taxes. So the NPS came up with the idea of making it really cheap, which if combined with a government administration system and marketing, might attract savers – or so they hoped. While there were challenges to start with, they have yet to execute the original design properly. For example, the PFRDA was supposed to do the marketing to raise awareness, which still hasn’t happened on the scale it needs to be effective.

Coming to mutual funds, again there are regulatory issues and then there are things that the industry could do now, like designing better products which dampen volatility, marketing in simpler language etc. Distributors and advisers could also do better with better education, written advice, aligning interests etc. to generate more trust.

Do Hubbis propagate Investment Awareness amongst retail investors in India?

We have and can create digital content, like animated videos, or pocketguides, that could help with investor awareness programs, that AMCs or banks could buy and make available to investors. We don’t reach out to investors directly.

Hubbis do lot of events and seminars across Asia, what is the rationale behind it and what are the takeaways for the participants?

Hubbis events facilitate the industry to get together to network, discuss and learn.

You are doing your second India conference”India Wealth Management Forum2014” on 3rd April in Mumbai. Who are the participants and what is the objective behind it? Who can participate, etc. please share.

We realised the events in India were not targeted at particular segments. For example the CII Mutual Fund Summit is attended by a mixed bag – from regulators to product manufacturers to distributors to end investors. So the topics have to cater to a wide audience.

We segmented our events-

Indian Retail Wealth Management Forum - on Thursday 3rd April 2014

Aimed at the mass and affluent segment - including banks' priority/wealth management segments, IFAs, broking firms, and NBFCs - this event will focus on discussing how to increase penetration of capital market products and balance quality and scale in distribution. Topics will focus on investment issues (understanding mutual fund styles, portfolio construction, solution-oriented products, financial planning) and business issues (process efficiency, client suitability, technology, regulation, training) etc.

Indian Private Banking Forum - on Thursday 21st August 2014

Aimed at the high net worth segment - including private banks, private wealth firms and family offices - this event will focus on business management issues (marketing, technology, compliance etc) and investment ideas for serving the wealthy. Topics will focus on niche products like alternatives and PMS, behavioural finance-based portfolio construction etc.

Within our forums we divide the day into two sessions – business and investment – to cater to senior management and advisers/IFAs respectively.

Any message you want to give or share any thought with the financial and Investment Advisors of India?

Whether through our weekly newsletters, events, publications, or formal online learning, our aim is to educate and raise professional standards. It is for anyone who wants to learn more and constantly get better at their job – whether high end private banker or an IFA.

Indeed, we want to develop more learning opportunities for the IFAs. We would like to work with some to ensure they are relevant and effective.

I would be happy to connect with more IFAs on Twitter @HansiMehrotra

Download Hubbis Annual Guide to Wealth Management in India
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