Rich or Wealthy? Who dominates in Armenia?

“I’ll tell you the secret of getting rich on Wall Street. So, try to be greedy when others are scared and be afraid when others are greedy. ”

Warren Buffett, the most successful investor in the 20th century

Wealth management is a kind of investment advisory widely available worldwide. The need for service is often felt by wealthy families and individuals who need the management of their possessions. There is no statistics on number of wealthy people who use wealth management advice in Armenia.

Banks.am has interviewed Karen Martirosyan the shareholder and strategic advisory director of the “Avenue Consulting Group” consulting firm about the gaps and tendencies of the sector, as well as the limits and outcome of wealth.

– Mr. Martirosyan, who are the players in the management of wealth and what mechanisms they use in their work?

– Periodically, industry research is being carried out, and various major consulting firms are trying to figure out the state of the industry and the development trends. For the sector’s players, it’s no longer the goal and task of not only providing superior services, but also the ability to respond to those changes in a rapidly changing environment and to make their client’s decision-making.

Private banking services are only one type of wealth management services. Other types include the planning of wealthy families, the formation of investment portfolios, inventory planning and management.

It should be noted that the concept of property implies a wide range of real estate ranging from real estate to cash, gold, copyrights, etc.

An important part of wealth management is the provision of legal and tax advisory services, such as how to manage wealth to reduce tax expenses. You have to deal with the laws of different countries because of the shift of wealth, moving from one legislative field to another.

Recently, there has been a trend in the states, literally shut down the legislative gaps, sometimes used by professionals, and providing the best result for their clients in terms of reducing taxes. By the way, there are interesting developments in the global market. the number of female clients is gradually increasing. It means that wealthy women have become more active in dealing with family property management.

– Are wealth management mechanisms today fully used in the Armenian reality?

– In Armenia, this service is new and maybe some partiality. Private banking services in Armenia can be considered as such. The latter are offered by different banks in the form of customer-specific status and services, consulting, as well as individual approach. The service is well-developed especially in the West. For example, Switzerland is offering the largest private banking services in the world.

In Armenia, even if there are such clients who benefit from some wealth management services, the matter is about simple services, most notably the acquisition of securities in different foreign stock exchanges, and more complex financial services are not yet available in our country.


Professionals needing international standards are required to provide wealth management services. The Ultra Wealthy Summit, recently held in Yerevan, aims to gather all interested parties who can become potential players in the market where banks, consulting firms, financial institutions, investment companies, venture funds operate. An attempt was made to discuss the issue of how to develop the sphere in Armenia. We also had guests from abroad who are professionals with many years of experience in the management of wealth. Experts from Malta and Cyprus shared their experiences with recent changes, particularly with respect to tax issues.

In Armenia, I don’t know such rich people who will benefit from the services of local companies, but possibly from the services of foreign companies.

In our country, there are serious professionals who need certification by well-known organizations such as portfolio managers, financial advisors, and more.

In terms of wealth management, customers should be treated according to the principle that their investment horizons are long-term, that is, how long they want them to make the money they invest. The factor of trust between the customer and the service provider is also important. Especially those companies that have long-term experience in wealth management, or those individuals who have come out of those companies and can find clients for themselves.

The largest companies that provide wealth management services in the world are UBS, JPMorgan, Credit Suisse, HSBC. As for Armenia, for example, Avenue Consulting Group serves as a consulting firm not only for corporate companies, but also for companies’ shareholders. Therefore, some of our wealth management issues are being tackled by our company.

-Who can be called rich?

– There are “rich wealthy” and “rich poor”. Being rich also presupposes material riches that you have to be spiritually prepared for that wealth. According to my personal observation, there are more “rich poor” in Armenia than “rich wealthy”. Wealth should be transferred to the generation, and in the short period of Armenia’s independence, this transfer has not yet been carried out, so we cannot say that we have wealthy people. Formation of wealth perception and management culture is a long-term process. In this sense, Armenia has a long way to go.

– What are the main trends of wealth in Armenia?

– In Armenia, unfortunately, the perception of wealth is still associated with real estate. Due to a number of factors that are historically shaped and transmitted from generation to generation, there is a great tendency for Armenians to acquire real estate, but it is a little bit broken. It happens not because our traditions are happening, but because of the high technology development and access to everyday life, business contributes to the gradual change of people’s thinking. It should also be considered non-material (virtual) wealth. You may have, for example, a website that will bring you millions of dollars in revenue and have 15 luxurious private properties.

-How to create and maintain wealth?

– There is no person who does not want more. To become rich, you need to be well-informed and to use that information correctly. If we look at the biographies of the rich and the way  they are enriched we will see the role played by right information and the right decision making at this point.

– Is there a strategy of communication with money or culture, and how much wealth do the Armenians possess?

– There are investors and rich people who are thinking long and manage wealth as long-term players. They expect that the result may appear later. There are also investors who, on the contrary, expect a faster result. Unfortunately, few people are willing to make long-term investments in the real sector (for example, industry), due to the current socio-economic and geo-political situation in Armenia and a number of other factors. Armenia needs investors who can get their money ready, not after a year, but in a longer-term and more stable terms.

– There are rich and poor in every country. But in some countries, including Armenia, the gap between the two layers has deepened. What is the reason? And is the middle class in danger of being eliminated in Armenia?

– There is a limited number of middle class in Armenia, but it is not enough to break the gap between the rich and the poor. The solution can be the most active role of the state. The latter should be able to contribute to the formation of the middle class and the minimum requirements for the poverty line as it was during the Soviet era.

– Are Armenian rich people extravagant or economical?

“The rich are never exhausted. If they were extravagant, they would not have been rich. They know the value of their wealth. But there are “rich wealthy” who are able to use their wealth in the interests of the society. They are those individuals who have inherited that wealth or have accumulated thanks to their intellectual abilities and human qualities. But if you want to be long-lasting, you also need some benefits to the public.

– Happiness is not in money, but … So often the rich or the rich who say these words try to justify their own laziness. In fact, happiness is in wealth.

– Money as a material means of happiness does not have an affair, but there are people who feel happy when they earn money. The process of earning money and making money are different. Can we say that money is a necessary, but not sufficient precondition for being happy?

Source՝  banks.am