How to create a wealth management firm? How to become a financial investment advisor? Can you practice without a diploma, what are the regulations?
A wealth management advisor, or financial investment advisor (the official term), is a professional who offers advice on optimising his clients' assets. They take into account personal, family, professional and economic aspects, as well as the legal and tax environment, in order to help them make the best investment choices.
The wealth management advisor must above all determine and respect the profile of his client, and in particular
their objectives in terms of profitability,
their wishes in terms of inheritance,
and their degree of risk aversion.
Note on the terms :
Wealth management is used for amounts between €150,000 and €1 million,
private management concerns amounts between 1 and 5 million €,
Finally, asset management concerns amounts of more than €5 million.
Here is everything you need to know about becoming an independent asset management consultant or setting up an asset management firm.
The wealth management market.
There are about 3000 independent asset managers (CGPI) in France, who represent a market share of about 8% of financial savings. The "GESPAT" market concerns more than 4 million households.
The wealth management and asset management market has been doing quite well since the end of the crisis and has even seen a strong recovery since 2014.
But it is a very evolving and competitive market:
The major banking networks are not hesitating to strengthen their position in this low-risk business, which allows them to raise welcome funds in the context of Basel III. The traditional banks benefit from their network and their reputation,
Private banks ("private banking" specialised in wealth management), both French and foreign, are capturing the wealthiest clients,
In addition, many competitors are appearing on the Internet.
Most of the business done by IFAs is in life insurance. IFAs' clients are traditionally older and more provincial.
Here are some trends in the wealth management market:
the advanced digitalisation of the sector: many online advisory platforms are emerging, which compete directly with independent wealth managers. In addition, the online brokerage is on the rise. These often recent players form the "FinTech".
Rapidly changing legislation: this is a constant challenge for IFAs who must adapt and train to new laws and regulations.
Difficulty in recruiting qualified staff: IFAs have difficulty in identifying competent profiles, which can hinder their development.
Faced with the digitalisation of the sector, independent advisers are relying on relationships and trust, particularly with older clients. Moreover, digitalisation can also be seen as an opportunity for IFAs, since it can facilitate the subscription of contracts and remote exchanges.