The Indian wealth management ecosystem is in the nascent stage but it is growing by leaps and bounds. Though the COVID-19 pandemic dwindled this growth, the market is recovering fast and the outlook now looks promising. According to a report by Boston Consulting Group (BCG), India’s financial wealth witnessed a growth of 11% per annum to USD 3.4 trillion during the period 2015-2020 and is expected to reach USD 5.5 trillion at 10% by 2025.
Market experts believe that the year 2022 will set the pace for the long-term growth story of the wealth management industry on the back of strong fundamentals. Let’s take a look at the key trends that will shape wealth management this year.
1. Need for Demographic-Centric and Personalized Approach
Wealth management is no longer a privilege for only High Networth Individuals (HNIs) and Ultra High Networth Individuals (UHNIs). Today, affluent middle-class families, double-income families, millennials, investors from Tier II and Tier III cities, and even retirees are exploring wealth management solutions.
Hence, wealth management firms need to take a demographic-centric approach to understand the investment needs of new-age clients, make wealth management accessible to them and offer them highly-personalized advice.
2. Growing Interest in Alternative Asset Classes
Today’s investors have a high-risk appetite and are keen to expand their portfolio beyond traditional investment options such as fixed deposits, equity, mutual funds, investment advisory services, real estate, and gold. They are now turning to alternative asset classes such as:
Thematic fundsCryptocurrenciesBitcoinsNon-Fungible Tokens (NFTs)Peer-to-Peer (P2P) lendingEquity crowdfundingVenture capital fundingInfrastructure Investment Trusts (InvITs)Environmental, Social and Governance (ESG) funds
3. Disruption Through Phy-digital Model
Human connections and relationships have been a primary driver of the wealth management industry. However, the demand for digitization has increased after the pandemic among tech-savvy investors. They want control over their investments in real-time at a few clicks of a button.
The wealth management firms are now looking into adopting a pay digital model to address this challenge. This model will enable the wealth managers to offer virtual advisory through seamless digital tools and process automation without losing the human touch to deliver a better customer experience.
4. Focus on Financial Goals
The goal of traditional investors was financial accumulation. However, modern investors are keen to save, invest and spend strategically. They prioritize focused goal-setting over wealth concentration. They want to be able to buy a new car in the short term as well as plan for retirement in the long term. They want both short-term investment options and long term investment in share market to meet their financial goals.
Wealth management agencies must offer these goals while providing a better risk-return trade-off.
5. Responding with agility
The wealth management market operates in a dynamic and fast-paced model. Investors expect their wealth managers to respond nimbly to spot the market opportunities and leverage them to earn them better returns.
This is possible only when wealth management firms understand the investor expectations and keep a close tab on every market movement and anticipate the possible changes.
One such company that can help you in your wealth creation journey is Purnartha Investment Advisors Pvt Ltd. At Purnartha, they have an in-depth knowledge of wealth management markets and always keep pace with the changing trends. They carry out comprehensive risk analysis for their portfolio management and investment advisory services. Research-based advisory, unbiased, and personalized investment strategies are some of their key strengths.
Sign in to leave a comment.