360 ONE WAM - Growth Momentum Intact Despite Challenging Environment: Motilal Oswal
Wide product suite reduces risk of cyclicality in flows.
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Motilal Oswal Report
360 ONE WAM Ltd., erstwhile IIFL Wealth Management Ltd., is well placed to tide over a difficult environment in terms of savings, wherein the equity markets have been volatile and interest rates have been rising.
With a wide product portfolio, 360 ONE is capable of countering the cyclicality as it is seeing strong traction in credit products and advisory mandates (IIFL One inflows of Rs 84 billion in nine months-FY23 versus Rs 35 billion in FY22).
In order to grow annual recurring revenue assets under management, 360 ONE is focusing on a five-point strategy:
increase wallet share among existing clients,
expand into new geographies,
increase share in inter-generation wealth transfer,
chase new money and
scale up asset management company.
Retentions could be under pressure as the asset mix moves toward fixed income and as competitive intensity increases.
360 ONE aims to improve the efficiency of RM by providing tech support to them. The number of families per RM is expected to increase from 30-35 to 40-45.
A product for the mass affluent is expected to be launched in Q1 FY24 under a separate brand. In the initial stage, the target would be key management personnel of businesses, whose promoter families are 360 ONE clients.
In terms of costs, the company expects fixed employee costs to rise in line with general inflation and expects variable pay to track AUM growth. Tech-related expenses are likely to be sustained as the company is developing a product for the mass affluent market and scaling up technology to support RMs.
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