The battle for clients has reached the wealth management market.

"The emerging among the emerging." This latest research from the Center for Social Policies of the Getúlio Vargas Foundation expresses a reality from the streets and the new socio-economic dynamics of our country in very precise numbers. There are already 22,5 million Brazilians in classes A and B, 13 million more than in 1993. These groups are the fastest growing in Brazil, more than class C, the research shows. And, with this new panorama, the demand for wealth management is also increasing. If, before, having R$ 1 million seemed something restricted to a few wealthy or privileged individuals, this reality has also changed. Today, banks and financial advisory consultancies compete for the management of the small (or large) fortunes of Brazil's new rich. Where to invest? How to avoid scattering this capital? How to manage it well so that it can fuel new businesses and investments? These are just some of the questions from clients seeking wealth management.

"After reaching their first million, many wonder what to do to invest all that money," comments João Camargo, partner at Lumina Partners, which provides financial advisory services to companies and individual investors. "Not only should the financial management of the first million be considered, but also the discipline regarding the use of this money," observes Camargo. "There needs to be a commitment to using only the real interest rate (return discounted for inflation), thus avoiding the deterioration of the principal and the loss of purchasing power."

As the demand for financial management of millions of reais increases in the market, so does the competition for these clients between large banks (and their private banking products) and asset managers and financial advisors. Although they have much smaller and leaner structures than the large banks, asset managers and consultancies are gaining more and more followers as the market becomes more sophisticated. Clients have also become more demanding; it wasn't just the amount of available capital that grew.

Today, a product bearing the brand of a financial institution is no longer enough to convince clients that their capital will be well managed, according to objectives and deadlines, and protected from market volatility. The era of the "red carpet" is also over: the newly wealthy want to see results and goals achieved on time. One of the main attractions of asset management firms, therefore, lies in the fact that they are not committed to specific products, as is the case with banks. This lack of ties to a particular financial institution helps to personalize capital management to the client's profile and, consequently, to build loyalty. To differentiate themselves in this competitive market, banks are also investing heavily in personalization and loyalty, since the products themselves vary little. Now that they compete for the same consumer, banks and wealth managers have one thing in common: both want to seduce the client.

"There are many advantages for those who have a large amount of capital for investment, and the main one is the possibility of diversification," says Camargo. Diversification also eliminates the risk of large concentrations in the same type of asset, a measure not always observed by banks, which prefer to allocate a given amount to the best of their products that accommodate it.

Wealth management is a growing market where clients have access to virtually the same products. The competitive advantage has proven to lie with those who can truly give meaning to words like "personalized service," "customized solutions," and "profile assessment."