India's Wealth Boom: How the Very Rich Are Making a New Era for Wealth Management Possible

Bernstein's report highlights India’s ultra-rich households, holding $11.6 trillion in assets, of which $2.7 trillion are liquid financial assets, driving wealth management growth. Rising capital markets and shifting financial habits are transforming illiquid assets into liquid wealth via IPOs and stake sales. A new wave of wealthy individuals from startups is expanding the high-net-worth base. Specialized wealth managers, managing 11% of liquid assets, are poised for rapid growth, with assets under management projected to rise from $300 billion to $1.6 trillion by 2035.

Bernstein recently released a study saying that India's richest families are likely to get even richer, which will be good for wealth management firms. The country's wealth advice services are changing because of this upward trend, which is being driven by the growing capital markets and changing financial habits.

The Rising Wealth of India's Elite

The study points out that the richest 1% of Indian households own an amazing $11.6 trillion worth of assets. About $2.7 trillion of this is held in liquid financial assets that wealth managers can use right away. These liquid assets, like bank deposits and non-promoter stock holdings, are what make the wealth management business grow.

More and more, Indian families are investing their money in financial assets. This trend, along with strong action in the capital markets, is making it possible for wealth management firms to reach a much larger group of people.

The capital markets are a way to make money.

The rise in India's capital markets has been a key factor in turning assets that aren't easy to sell into cash. Many of the country's very wealthy have used initial public offerings (IPOs), stake sales, and block deals to turn promoter interests into easy-to-get-to money.

A new group of wealthy people has also come into the world thanks to the growing startup environment. More and more founders, early employees, and other important people in successful startups are becoming high-net-worth individuals (HNIs). This makes the group of very wealthy people even more diverse and large.

Chances for Wealth Managers

There is a growing need for skilled wealth management services, but the market is still not very well organised. At the moment, only 11% of the $2.7 trillion in liquid assets are held by specialised wealth management groups. This wealth is still mostly controlled by big banks, unorganised players, and people who invest their own money.

But specialised wealth managers are in a great situation to take advantage of this growing need. They have an advantage over their competitors because they offer personalised services, a wide range of products, and have relationship managers with years of experience.

According to the Bernstein study, these companies will grow their assets under management (AuM) at a very fast rate of 20–25% in the short term and 18–20% per year for the next ten years.

Ten Years of Huge Progress

The study talks about two main factors that will cause this growth. First, the ultra-rich's pool of liquid assets is expected to grow by 13% each year. Second, it is expected that specialised wealth managers will grow their market share from 11% now to 17%.

The average wealth of specialised wealth managers could skyrocket from $300 billion today to an amazing $1.6 trillion by 2035 if these trends continue.

The number of India's very wealthy people is growing, and so is their desire for skilled financial advice. With the capital market growing, the startup environment maturing, and people's changing financial habits, now is the perfect time for wealth managers to become essential partners in managing the wealth of the country's elite.

For India's financial future, the wealth management business will be very important as the wealth of the top 1% continues to grow.