India’s wealth management industry is at a turning point, similar to the changes seen in the UK and US 25 years ago. With 750 million savers and only 55 million mutual fund investors, there is a huge opportunity to move from saving to investing. The quick rise of fintech brokers, which have captured 36% market share in just five years, shows the growing need for digital-first solutions.
The Affluent Opportunity
The affluent segment, made up of individuals with annual incomes between ₹7 Lakh and ₹1 Crore, represents a $4 trillion market. They focus on building wealth and are becoming more willing to make informed investment choices. However, traditional distribution models are no longer enough. A low-cost, digital-first approach is crucial to effectively serve this segment. New strategies include placing financial planning at the centre, using hybrid delivery models that combine human advisors with digital platforms, and creating intuitive products that meet various investment goals.
Technology as the Catalyst
India is the most digital financial market in the world, and financial service providers must fully take advantage of this. Technology allows for personalized solutions at scale, helping digital enablement of advisors while keeping costs down. Neobrokers and self-directed investing challenge traditional distribution, forcing incumbents to innovate with their own digital offerings or partner with others.
Products to Portfolios
The industry is moving away from single-product offerings to holistic portfolio solutions. For example, fee-based models, with portfolios focused on outcomes and tailored to client needs. Asset allocation is now central to client interactions, and wealth portfolios are starting to include more index funds and ETFs. This trend matches global developments, where wealth ETFs and index-managed funds in EMEA are expected to grow from $2.1 trillion in 2023 to $3.2 trillion by 2028
India’s Wealth Spectrum
The wealth spectrum in India shows the need for differentiated delivery models:
* Mass Market (<₹7 Lakh): Focused on first-time investors and savings, offered through digital and hybrid models.
* Mass Affluent/Affluent (₹7 Lakh–₹1 Crore): Concentrated on wealth building with informed investment choices, supported by digital and personal advisory.
* HNI/UHNI (₹1 Crore+): Addressing various goals like retirement, tax planning, and estate management, provided through personalised advice and discretionary management.
The Path Forward
India’s wealth management industry needs to adopt fee-based advisory, digital tools, and hybrid models to serve a wider range of customers. The shift from saving to investing will be driven by outcome-focused solutions, competitive prices, and technology-enabled personalisation.
Conclusion
India’s wealth management landscape is ready for change. By focusing on digital-first solutions, personalised advisory, and portfolio-based offerings, the industry can reach its full potential and empower millions of savers to become investors.
(Marc Pilgrem is MD &CEO, JioBlackRock Investment Advisers.)
Views are personal, and do not represent the stance of this publication.
Disclaimer: Moneycontrol is a part of the Network 18 group. Network 18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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