The wealth management industry is in a state of flux, with new players entering the market and triggering a war for relationship managers (RMs). This talent war is not just about attracting top RMs, but also about managing the costs and productivity gains that come with them. As private equity-backed platforms, banks, and specialist wealth firms expand their businesses, established players are seeing rising competition for RMs who can advise high-net-worth (HNI) and ultra-high-net-worth (UHNI) clients. The pressure is pushing up compensation costs, forcing listed wealth managers to focus on productivity gains, technology, platform strength, and internal talent pipelines to protect margins. In my opinion, this is a critical moment for the industry, as the talent war is not just about attracting top RMs, but also about managing the costs and productivity gains that come with them. The influx of new players is turning into a talent war, with RMs emerging as one of the most contested resources. The supply of RMs who can advise HNIs and UHNIs remains limited compared to the pace at which the industry is expanding. This is particularly interesting because it raises a deeper question: how can the industry sustain its growth and profitability in the face of increasing competition and rising costs? The answer lies in the ability of wealth managers to adapt and innovate, and to focus on building internal talent pipelines. In my view, this is a critical aspect of the talent war, as it allows wealth managers to reduce their dependence on lateral hiring and build a strong cushion against external competition pressures. The wealth management industry in India continues to be a large structural growth opportunity, which is naturally attracting new entrants, including private equity-backed platforms, banks, and specialist wealth firms. As a result, competition for experienced RMs has increased across the industry. According to industry insiders, senior RMs can command average salaries of around Rs 70-80 lakh per annum. Top RMs who cater to family offices and UHNIs and manage over thousands of crores of client assets can command between Rs 1 crore and Rs 1.5 crore or even more with incentives included. This is a significant development, as it highlights the growing importance of RMs in the wealth management industry. The pressure is also pushing up compensation costs, forcing listed wealth managers to focus on productivity gains, technology, platform strength, and internal talent pipelines to protect margins. In my opinion, this is a critical moment for the industry, as the talent war is not just about attracting top RMs, but also about managing the costs and productivity gains that come with them. The cost-to-income ratio for a wealth management company measures how much it spends to earn revenue. A lower ratio indicates better operating efficiency and stronger margin discipline. In the same call, Bhagat said discipline on people cost was a “critical part” of the efficiency agenda. The company has continued to be at the top end of compensation, “more often than not, above 90th percentile”, but hiring now has to be matched with platform productivity, he said. The wealth manager is also using technology and AI-led tools across learning and development, client acquisition, pipeline management, portfolio suitability, product recommendations, portfolio reviews, servicing, and client engagement. On its Q4 earnings call, Nuvama’s MD and CEO Ashish Kehair warned that several new players were making “lofty promises” to RMs around future valuations, which were “extremely stratospheric” and with “no visible monetisation signs”. In my opinion, this is a critical moment for the industry, as the talent war is not just about attracting top RMs, but also about managing the costs and productivity gains that come with them. The supply of RMs who can advise HNIs and UHNIs remains limited compared to the pace at which the industry is expanding. While compensation for senior talent has moved up, sustainable value creation will come from combining quality talent with a robust platform and operating model, it said. On a net basis, Nuvama added around 80 RMs in the last fiscal. Senior RMs carry a higher compensation profile but they manage larger and more complex client relationships, Nuvama said. Since support costs do not increase proportionately, their higher absolute revenue contribution helps productivity and operating margins, it added. The wealth manager is also using technology and AI-led tools across learning and development, client acquisition, pipeline management, portfolio suitability, product recommendations, portfolio reviews, servicing, and client engagement. In my opinion, this is a critical moment for the industry, as the talent war is not just about attracting top RMs, but also about managing the costs and productivity gains that come with them. The wealth management industry is at a crossroads, and the ability of wealth managers to adapt and innovate will be critical to their success in the face of increasing competition and rising costs. The talent war is not just about attracting top RMs, but also about managing the costs and productivity gains that come with them. The ability of wealth managers to build internal talent pipelines and focus on sustainable value creation will be key to their success in the coming years.
