Up To The Challenge

Vijay Goel, who heads Motilal Oswal Private Wealth Management, has both an exciting and competitive market to operate in

- Salil Panchal

If pure statistics were all to go by, Vijay Goel, Motilal Oswal Private Wealth Management’s (MOPWM) managing director and CEO, would have been a worried man. Revenues for the wealth management firm edged up just 2 percent to 24.9 crore and profits fell 40 percent to 2.6 crore in the quarter ending December 31, 2018, from the previous (September-ended) quarter.

Assets under management (AUM), meanwhile, grew just 7 percent trailing behind giants such as Kotak Wealth Management, IIFL, Edelweiss Wealth Management and Axis (see table). At the same time, operating costs increased 17 percent as the group continued to hire relationship managers (RMs) to grow this business. This resulted in a lower Ebitda (-41 percent) for Q3FY19 and lower profits.

But Goel doesn’t seem to be worried. “The quarter gone by was tough for the industry as a whole,” says Goel, adding that investors were shy to put money in increasingly volatile equity markets and stayed away from even debt products. Also, for companies selling mutual fund schemes—and this includes wealth management companies—several regulatory changes were announced by Sebi, which would have a direct impact on costs and profitability of the company and also earnings packages for their talent pool— mainly RMs. These changes will come into effect from April 1, 2019.