Wealth Management in India Gearing Up for Growth – Report

Nick Parmee

23 January 2008

The Indian wealth management industry is readying itself for expansion, as providers, products, channels, technology, regulation and clients are seen as coming together in the wealth management space, according to a report from Boston-based financial research and consultancy firm Celent. Overview of Indian Wealth Management Market says that the wealth management market is currently undergoing structural changes, with more penetration by organised players drawing clients from the unorganised end of the market. Currently, the Indian financial sector has about 7 per cent of the total national disposable income. Its share will grow to 18 per cent by 2012, it is estimated. The Indian market has been segmented by wealth management service providers into four categories, namely: the mass market (investable surplus $5,000 to $25,000); the mass affluent ($25,000 to $1 million); the high net worth (HNW $1 million to $30 million) and the ultra-high net worth (UHNW greater than $30 million). The lower sectors are at present growing at 30 per cent for the mass affluent and 27 per cent for the mass market. The report says that Indian wealth management has moved from protecting wealth to growing wealth and that there is movement towards more sophisticated customer segmentation, products and delivery channels. By 2012, India’s wealth management market is expected to be $1 trillion in around 42 million households, up from 13 million households at present.