Better Tax Treatment of Capital Gains Encouraged Greater Participation in Financial Assets Soumya Rajan Founder CEO of Waterfield Advisors


How will wealth management evolve over the next decade? Are we considering a more “high tech, low touch” proposal by 2030? If so, how will the role of the traditional Wealth Manager evolve?

India is at a very exciting stage in terms of wealth creation. We represent US $ 12.6 trillion or 3.3% of the world’s wealth. Over the next 5 years, the wealth of high net worth people (defined as people with more than US $ 1 million in financial assets) is expected to grow at a CAGR of 27%. This is unprecedented growth. Technology will play a big role in democratizing access and lowering the cost of financial products. At the same time, however, there will be a movement to seek out holistic wealth advisers or businesses that can support the financial well-being of clients through global investments, estate planning, tax advice and philanthropy. Previous generations have worked with multiple service providers to meet specific needs. The current generation will value their time more and look for vendors who support integrated and collaborative solutions. The new Wealth Manager will therefore need to understand the interplay between trust, technology and traditional human interaction.

You recently raised a new round of $ 6 million. How do you plan to deploy this?

Over the past 8 years, we have strived to be the most outstanding financial advisory firm in India, deeply committed to ensuring a conflict-of-interest-free approach in all of our dealings with our clients. This has resonated incredibly well with our clients and investors. The new fundraising allows us to further develop the business, increasing our consulting platform through talent acquisition, improving the overall client experience through cutting-edge technology and analytics; and strengthen our international presence in key geographies in the United States, Singapore and the Middle East. The capital will strengthen our leadership position.

What is your customer sourcing strategy? Is it just word of mouth or are you actively looking for new accounts as well?

We primarily supply our customers through customer referrals. We also benefit from very close proximity to various suppliers of products and services, namely asset management companies, venture capital and private equity firms, investment banks, investment firms, investment firms. lawyers, tax consultancy firms, etc. Each of them appreciated the quality of the practice. that we are building and our “customer first” approach. Most importantly, our investors have also always been extremely helpful and early adopters of our ethical business model.

In today’s open architecture era, how does a Family Office business differentiate itself in terms of product proposition?

If you are a Family Office, you shouldn’t be making a product! You must meet the needs of a family without conflict of interest. True open architecture means no product manufacturing; the world of financial services should be your oyster, and you should have the ability to evaluate any overall product for your client, no matter where they are. At Waterfield, our role is to be able to assess risk, conduct due diligence and peel the onion from the product; and determine its suitability for a client. Therefore, we are open to working with any financial institution / fund manager that makes a good financial product.

Tell us a bit about your Development Impact Bond. What was the thought process behind its launch?

In July of last year, we launched “Lakhpati Kisan” to tackle the problem of agrarian distress. The obligation aimed to triple the annual income of farmers over a three-year period in some districts of Jharkhand, Gujarat and Odisha. Traditionally, to this day, all DIBs for Indian NGOs have been funded by foreign capital. At Waterfield, we believed that had to change. There was also considerable leakage in terms of what was raised and what was ultimately provided to NGOs. This ranged from ~ 25-40 percent. The objective of the national DIB was therefore twofold: to attract national philanthropic capital to create a sustainable financing product for the social sector and, second, to ensure that nearly 90% of the funds raised through the DIB go to the NGO. . The other big by-product of the DIB is that it focuses on results-based funding, which donors traditionally strive for. It took us a year to figure out how to develop the DIB with domestic capital. What makes me personally proud is that he can be a role model for any NGO that is committed to fundraising through results based results.

What’s your budget wishlist for the wealth management industry?

Wish lists are always long! But that said, would be happy to see better and less ambiguous tax laws for alternative investment funds and investments in unlisted companies. As a country, we encourage entrepreneurship, which in turn creates a virtuous circle in terms of the need for credit (as the business grows) and job creation. Not all entrepreneurs can finance themselves, so investors need to be encouraged, perhaps through tax incentives, to participate in the growth of start-ups. This is reminiscent of the better tax treatment of capital gains afforded to public markets over the years, which has encouraged greater participation in financial assets.

Finally, tell us about your business goals for the next fiscal year.

We have ambitious plans for FY21. This summer, we will be opening our international offices in New York. Our business goals are to achieve $ 5 billion in assets under advice, increase our revenues by 30 percent, and be a company of choice for customers and employees.

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