Soon, financial planning services may not be confined to private bank customers. The country’s largest lender, State Bank of India, is set to offer wealth management and financial planning services to its customers who hold more than Rs 5 lakh in the bank.
Though the bank will formally launch the service in a few weeks, it has already approached around 30,000 customers. “Not everyone has shown enthusiasm but, we expect the response to improve once there is more awareness about what we are offering,” said a bank executive, without disclosing the number of account holders who have opted to avail of the service.
The exact number of account holders who will benefit from the move could not be ascertained, but, a senior SBI executive said the bank would have over a million customers with the required balances.
To start with, the bank has hired 1,200 financial managers and has started training them. The exercise to hire another 1,200 professionals has started. There will also be 5,000 financial planners over the next two years or so, an executive said. Majority of the managers are being hired from the industry, though a few SBI executives have also been roped in by the personal banking department.
SBI is the latest lender, and among the first in the public sector, to offer wealth management and financial planning services to its clients. Private and foreign banks were first off-the-block with non-banking finance companies too targeting high networth individuals.
Though the bank has trained its manpower to begin the services, technical glitches are holding back a full-fledged roll out. “We did not have the software and hardware. Now, TCS has developed the software and the hardware should be in place in a month or so,” said an SBI executive, associated with the exercise.
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The executive said the branches will depute financial planners to approach account holders with over Rs 5 lakh in their kitty, to ascertain whether the financial strategy adopted by the customer is correct or not. The planner will also help the customer plan cash flows and income and expenses and also, firm up financial goals with specific target dates.
The financial managers will then assess the risk appetite and tolerance levels of the customers who opt for the scheme and suggest if the existing savings and investment practice are in line with the risk appetite or not.