The Indian demographics is changing with a rapid rise in the number of HNIs. These HNIs are turning to wealth managers for advice on avenues to invest their wealth.
What are HNIs looking at?
Philanthropy: Impact investment is catching up with the Indian market. Both the HNIs and the angel investors are no longer looking at wealth creation and passing it to next generation but are becoming socially responsible. Many of them are actively sponsoring NGOs working at the grass root level for upliftment of the society. Quite often wealth managers get enquires for setting up charitable trust for social causes.
REITs and InvITs: As physical assets like real estates and gold are no longer attractive, the HNIs are moving towards innovative vehicles like REITs and InvITs. These allow them to monetise their real estate and infrastructure assets by investing in them without actually owning them.
Offshore investments: Many HNIs want to invest in securities abroad. However, as the Indian regulations do not permit direct investments, wealth managers assist them to open bank accounts in foreign destinations. Then the relationship managers of these banks assist them in investing in suitable products through their online platforms.
Property abroad: With kith and kin of HNIs heading overseas for studies and work, they tend to invest in property abroad to make their stay comfortable.
Use of Analytics in Investment India is still in the nascent stage with the use of artificial intelligence and deep learning. There is a great deal of potential for customizing products to small segments with as little as 30 people if we can tap data from unstructured sources like social media using analytics. Also, we are still developing technology to deploy learning algorithms to derive meaningful results, analyse and test them. Also, use of AI will help in reducing the cost of surfing the wealth customers and broadening the funnel of categorising the HNIs.
Emerging affluent base – An opportunity With better education and job prospects a larger number of people in India are becoming social mobile. They take wealth manager’s support for investment opportunities to secure their wealth. To conclude, with the number of HNIs expecting to double by 2022, wealth management is proving to be the fastest growing segment in the financial sector. Regulators, asset managers and wealth managers should work in tandem to make the most of it. A B Ravi of CNBC-TV18 had a detailed discussion on the prospects of wealth management in India with Nitin Singh MD & Head, Standard Chartered Wealth Management, India, Ashish Garg, Partner and Director, Boston Consulting Group, & Kallish Kulkarni , CEO , L&T Investment Management.
Catch the full episode: https://www.youtube.com/watch?v=WWFtUE7q2FY
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