India Wealth Management – High Net Worth (HNW) Investors

India Wealth Management Market Report Overview

The Indian HNW market is dominated by older and professional males. HNW investors have mainly sourced their wealth from earned income; entrepreneurial income and inheritance form smaller yet growing sources. In a highly competitive market such as this, advisory mandates have the highest demand, yet offering a multi-service proposition underpinned by a proven ability to demonstrate returns will be key to tapping into demand. Growing appetite for managed mandates and alternative investments provides arguably the most significant growth opportunities for wealth managers in the foreseeable future.

The India wealth management market report analyzes the investment preferences and portfolio allocations of Indian HNW investors. It profiles them in terms of their demographics, analyzes their propensity to invest offshore, and explores product and service demand.

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India Wealth Management Market Dynamics

Earned income is the prime source of HNW wealth creation in India, reflecting the presence of a large number of high-earning executives in the country. As an economic powerhouse in Asia, India is home to several conglomerates and technology giants, with many global multinational corporations establishing their headquarters and operations in the country. As the Indian economy recovers from the adverse impacts of the COVID-19 pandemic, executive compensation has been on the rise. A few of the other sources of income in India are entrepreneurial income, family business, and inheritance.

In terms of industrial growth despite the global economic downturn, the Indian economy has remained resilient with an estimated GDP growth rate of 7.3% in FY 2023–24. Surging domestic demand, increasing public infrastructure investment, and easing inflation are the key factors responsible for the Indian industrial sector growth. The top three contributors to HNW wealth including healthcare, tech and telecommunications, and financial services reported strong growth in 2023. The healthcare sector was the leading wealth generator for Indian HNW investors in 2023 benefitting from increased government investment and reforms in the sector. In September 2023, the Ayushman Bhav initiative was introduced to extend healthcare services to all villages in India. Growing structural healthcare reforms coupled with increasing consumer income and an aging population are expected to further fuel growth in the sector, supporting wealth generation.

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India Wealth Management Market Segmentation by Investment Style Preferences

The key investment style preferences for HNW investors in the Indian wealth management market are advisory mandates, execution-only mandates, discretionary mandates, robo-advisor services, and professional wealth managers. In 2023, advisory mandates led the Indian HNW investor portfolio. Given the importance of lack of expertise in seeking professional advice, HNW investors want to delegate the complex aspects of managing an investment portfolio to experts, yet they do not want to give up control entirely.

India Wealth Management Market Analysis by Investment Style Preferences, 2023 (%)

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Download a Free Sample India Wealth Management Market Segmentation by Asset Allocation Preferences

Equities, bonds, cash and near-cash products, real estate, commodities, and alternatives are the major asset classes of wealth allocation for HNW investors in the India wealth management market. Equities constituted the largest Indian wealth management market share, followed by cash and near-cash products, and bonds among others in 2023. Indian investors are optimistic about the country’s growth prospects amid broad economic and political stability. Increased participation from domestic investors and strong corporate earnings drove the country’s prospects. Indian HNW investors also allocate a notable amount of their wealth to cash and near-cash products, limiting wealth managers’ fee-earning potential.

India Wealth Management Market Analysis by Asset Allocation Preferences, 2023 (%)

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India Wealth Management Market Segmentation by Offshore Investment Preferences

The key offshore investment preferences in the Indian wealth management market are business interests, local political instability, general geographic diversification, better returns, and tax efficiency among others. In 2023, business interests was the most prominent driver for offshore investments. Established businesses are likely to operate in multiple jurisdictions and their wealth will be spread across several countries around the world. Wealth managers need to provide products that minimize foreign exchange risks to gain an edge over the competition. Local political instability and geographic diversification are the other key factors driving offshore investments for Indian HNWs.

India Wealth Management Market Analysis by Offshore Investment Preferences, 2023 (%)

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Scope

• Expats constitute 22% of the local HNW population. They represent an attractive target market thanks to their more complex service requirements.
• Robo-advice accounts for just 17.5% of the Indian HNW portfolio. Demand for robo-advisory services is expected to grow at a robust rate over the next 12 months.
• Equities and cash and near-cash investments dominate the Indian HNW asset portfolio.
• The average Indian HNW investor offshores 58.8% of their wealth abroad.

Key Highlights

• Expats represent an attractive target market thanks to their more complex service requirements.
• The market for robo-advisory services is growing rapidly in the HNW space in India.
• Equities, property, and cash and near-cash investments dominate the Indian HNW asset portfolio.

Reasons to Buy

• Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.
• Enhance your marketing strategies and capture new clients using insights from our data on HNW investors’ asset management style preferences.
• Tailor your investment product portfolio to match the current and future demand for different asset classes among HNW individuals.