Indiatimes.com

Having seeing sharp erosion in their portfolios due to aggressive calls taken by their institutional broking houses, high net worth individuals are now turning to boutique advisory firms. Such firms have seen increased business since April.

Unlike big institutional brokers, boutiques are small investment firms offering specific services to a select number of individuals with assets under management between Rs 100 crore and Rs 500 crore on an average. These investment firms provide a highly personalized environment wherein they try to determine their personal goals.

Said Raj Majumdar, founder and CEO, iMetanoia, a Bangalore-based advisory firm, “Being exasperated with the wrong aggressive calls by big broking houses, which in turn resulted in major capital erosion to the tune of 70-80 per cent, HNIs are increasingly turning their focus to boutiques for a safer personal finance model.”

iMetanoia has seen 300 per cent surge in HNI clients in the last three months and currently manages Rs 250 crore corpus. Majumdar also observed that the recession had made HNI investors more mature.

“Earlier, they blindly reposed faith in big institutions who used to take aggressive calls for which the former paid a heavy price. Now when they contact us, they seek rationale for every investment strategy,” Majumdar added.

On their part, boutiques have initiated a campaign to woo HNI investors, especially those having assets between Rs 50 lakh to Rs 20 crore. Instead of spending on advertisement, advisors are approaching people through personal contacts.

“The best way to approach HNIs is the ‘push strategy’ wherein we contact our existing HNI clientele to expand the customer base through their kith and kin,” said Amar Pandit, Director, My Financial Advisor, which has seen 30-35 per cent growth in business since April. Currently, My Financial manages AUM of Rs 500 crore.

Boutique advisors feel that the recession has led to a level playing field, and it is time they capture considerable chunk of market share from big institutional brokers by promising a comprehensive and safer personal finance model which is expected to give decent returns.

Said Shiv N Majumdar, founder - Celerity Consultants, “there is perceptible inclination towards boutique advisory services post the recession. We have seen 30 per cent increase in our HNI clients in last few months.”

“We deliver additional 15 per cent CAGR return as compared to the market returns. It is made possible without taking unnecessary aggressive calls,” he added.

So what if any wealth management services offers to acquire them now? Well, boutiques who find themselves at the driver’s seat, feels that they would not be interested while they can run well of their own.