Ace takes a holistic approach to wealth management

Ajeet Singh Karan, founder and CEO of Indian boutique firm Ace Wealth Management, talks about his method of managing private wealth.
Why did you start Ace?
I perceived a need for genuine wealth management advice. I found that most of the wealth management professionals I dealt with spent their time pushing products on which they earned high margins, but which didn't solve the clientÆs problems or fulfil the clientÆs needs. I found that churning was high at the clientÆs cost.

With respect to insurance products specifically, many wealthy people did not even have a basic understanding of pure term insurance (the cheapest and best form of insurance) but were sold high cost endowment or money back type plans because advisers earned much more on these products. New fund offerings from mutual funds were more aggressively marketed than the tried and tested funds with strong track records because the commissions on the former are three times that of the latter.

In essence, I felt that no-one looks at a client's holistic financial scenario to recommend a suitable wealth creation plan. Allied to all this is the huge financial illiteracy on the part of some wealthy people. Investing is my hobby and over the years I've been able to deliver returns so we decided to offer services professionally and started Ace.

What differentiates your wealth management services?
We view our clients' finances holistically and recommend a plan that covers insurance, wealth creation and preservation through investments across asset classes. We do this after an analysis of a client's existing assets and liabilities, cash flow and risk appetite. We don't churn unnecessarily. We recommend investments in funds where I have invested personally.

We are advisers and not asset managers in so far as we don't have our own products so we are free to choose from the entire gamut of investment options such as mutual funds, portfolio management schemes and insurance without bias. We disclose our commission structures upfront to clients.

We are not stock brokers. I believe most people don't have the time, resources and expertise to invest directly in shares. In many cases direct involvement in the stockmarkets degenerates into speculation and we do not want to be a party to this. We recommend mutual funds instead.

What is your client profile?
Our clients span the gamut of high-net-worth-individuals, businessmen, non-resident Indians across the globe and people just starting out in their earning life. We are selective about clients we take on. We want to teach people to invest well and are rewarded when a client achieves stability in his financial life. So we accept even entry level clients (with a small net worth).

Assets under management (AUM) is not a deciding factor for us but matching wavelengths is. Last month I turned away a client as he was adamant on investing a huge amount in equity for one year. Short-term investing in equity is something that we don't recommend so I did not take him on. Since we started in 2006 we have grown both our client base and AUM by 100% annually.

What are you currently advising your clients, given the high level of volatility in Indian markets?
Stay invested and remain focused on your long-term goals. Don't let short-term noise sway you.
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