HNWI of Indian Wealth Management Industry – Trends, Analysis And Forecast (2010-2015)
India has registered tremendous growth in terms of the population of HNWIs and their wealth, especially after the recent economic crisis; wealth management firms are now targeting this highly untapped market, offering HNWIs highly customized services and multiple investment opportunities
Clients have now become more cautious about selecting their wealth managers, taking into consideration factors such as advisory capability, brand, image and reputation, and personal relationship before making a choice. Equities and related investment once again leads various investment options available to HNWIs followed by debt related instruments
The wealth management market in India is dominated by the domestic banking sector. Many new firms are realizing the attractiveness of the Indian market and thus making huge inroads into the country. Although foreign banks have significant banking operations, their wealth management business is still at a nascent stage. Wealth manager are shifting their focus towards Tier II and Tier III cities
Scope of the report
Market Overview: This section talks about the wealth and population of HNWIs in India and the various products and services offered to them. While commenting on the opportunities among Indian HNWIs for wealth management firms, it also discusses winning imperatives for the firms.
Market Dynamics: This section discusses in detail the investment of HNWIs in various available asset class, which has been broadly classified as equity and equity related products, fixed income products and alternative investment products.
It deeply analyses the behavior, needs and demands of HNWIs as a whole as well as demands based on age and source of wealth accumulation.
The section also analyses the various drivers for HNWIs wealth creation, the forecast of HNWI wealth and the restraints and challenges faced by the wealth management companies operating in India.
Trends of HNWIs in India
This section talks on various trends of HNWIs in India such as concentration of HNWIs in Tier I and II cities, HNWIs selection criterion for wealth manager,
This section discusses the various players in the banking as well as non-banking sectors in India. It also discusses the market share of wealth management firms in India in terms of AUM and clients per advisor, and benchmarking of various firms in the country.
This section describes companies offering wealth management services in India, and include an overview, primary business, wealth management operations in India, strategies followed by them and recent developments related to wealth management operations in India.
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Key questions answered
- How Indian HNWI offers opportunity to the wealth management firms.
- Needs, demands and behavior of HNWI in India
- Trends of HNWI in India
- How can you reposition yourself in the wealth management industry?
- What are the major drivers and opportunities in the market?
- What is the competitive outlook? Who are the major players in the market segments?
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TABLE OF CONTENTS
1.1 Report purpose
1.2 Report catalyst
1.3 Report structure
1.4 Research objectives
1.6 Research methodology
2 MARKET OVERVIEW
2.1 HNWI in India
2.2 Wealth management products and services for HNWI in India
2.2.1 Wealth management products
2.2.2 Wealth management services
2.3 Winning imperatives
2.3.1 Expertise in third party & in-house products
2.3.2 Client serving model
2.3.3 Talented relationship managers
3 MARKET DYNAMICS
3.1 HNWI investments allocation in different asset class
3.1.1 Asset allocation in equity and equity related products
3.1.2 Asset allocation in fixed income products
3.1.3 Asset allocation in alternative investments
3.2 Needs and demands of HNWI
3.2.1 Financial planning and advisory asset management services most demanded by HNWI
3.2.2 HNWI demand frequent personal interaction with wealth managers
3.2.3 HNWI of different age group have different investment objectives
3.2.4 Investment preference of HNWI based on source of wealth
3.3 Analysis and forecast
3.3.1 Macro economic drivers
220.127.116.11 Real GDP growth rate
18.104.22.168 Compensation per employee
22.214.171.124 Household saving rate
126.96.36.199 Domestic market capitalization
188.8.131.52 Deposit interest rate
3.3.2 HNWI wealth forecast in India (2010 – 2015)
3.3.3 Restraints and challenges for wealth management firms
184.108.40.206 Shortage of talented relationship managers
220.127.116.11 Lack of product knowledge among clients
18.104.22.168 Regulatory issues
22.214.171.124.1 ‘Fund of fund’ schemes
126.96.36.199.2 Direct tax code
188.8.131.52.4 Disclosure of investor complaints in the annual report
4 TRENDS OF HNWI IN INDIA
4.1 Large population of HNWI in India remains out of reach of financial advisors
4.2 HNWI consider advisory services as major criterion to select wealth managers
4.3 HNWI rely more on recommendations from familiars in choosing wealth manager
4.4 Wealth managers targeting HNWI in tier ii and tier iii cities
5 COMPETITIVE LANDSCAPE
5.2 Non banks or financial institutions
5.3 Market share analysis of wealth management firms
5.4 Benchmarking of wealth management firms
6 COMPANY PROFILES
6.1 AXIS BANK LID
6.1.2 Primary business
6.1.3 Wealth management business
6.2 DEUTSCHE BANK
6.2.2 Primary business
6.2.3 Wealth management business
6.3 HOUSING DEVELOPMENT FINANCE CORP LTD
6.3.2 Primary business
6.3.3 Wealth management business
6.4 HONGKONG AND SHANGHAI BANKING CORP LTDã
6.4.2 Primary business
6.4.3 Wealth management business
6.5 ICICI BANK LTD
6.5.2 Primary business
6.5.3 Wealth management business
6.6 KOTAK MAHINDRA BANK
6.6.2 Primary business
6.6.3 Wealth management business
6.7 STANDARD CHARTERED LTD
6.7.2 Primary business
6.7.3 Wealth management business
6.8 RELIGARE MACQUARIE PRIVATE WEALTH
6.8.2 Primary business
LIST OF FIGURES
1 Market segmentation of households on the basis of wealth
2 Growth rate of HNWI population-world, Asia Pacific, India
3 Percentage share of HNWI population & wealth (2009)
4 HNWI investment on the basis of key asset class (2009)
5 HNWI investments in various assets (2009)
6 HNWI investment in fixed income products
7 HNWI investment in alternative investment
8 Rating of services as preferred by HNWI
9 HNWI characteristics
10 HNWI age wise distribution
11 Source of wealth accumulation
12 GDP growth rate (2005 – 2015)
13 Change in average nominal wages (2005 – 2015)
14 Household saving growth rate (2005 – 2015)
15 Domestic Market Capitalization
16 Deposit interest rate (2005 – 2009)
17 Forecast of HNWI wealth (2009 – 2015)
18 Large percenatage of HNWI in India still untapped by financial advisors
19 Most prefered parameters in selecting wealth manager
20 Factors affecting choice of wealth manager
21 Income per households of cities in India (2008)
22 Market share of wealth management companies in India
23 Benchmarking of wealth management firms
India has registered tremendous growth in terms of the population of HNWIs and their wealth after the global financial crisis. The population of HNWIs and their wealth grew by 50.9% and 53.8% respectively in 2009. Wealth management firms are now targeting this highly untapped market, offering HNWIs highly customized services and multiple investment opportunities.
Advisory asset management and Tax planning is the most demanded services among HNWIs. In products . HNWIs have again started investing in equities with 31% of the total investment in equities. However, fixed income investment is still a favorite among HNWIS, attracting around 65% of the total investment invested in financial assets.
HNWIs in India present some unique trends in terms of their attributes, selection of wealth manager, and their concentration in Tier II and Tier III cities.
Around 69% of the Indian HNWI population is in the age group of 30-55, which has long term investment plans and thus requires financial planning and advisory asset management. This presents an opportunity for wealth managers to cross-sell their other investment products. Indian HNWIs have a limited understanding of the risk and returns associated with investment products and thus require personal attention and assurance from wealth managers which has led to a growing importance of face to face relationship management. Around 39% of the HNWI wealth has been accumulated on the basis of business income, leading to a demand of solution which can help to protect wealth and risk mitigation.
Indian HNWIs form a highly diverse group, and like their counterparts they want to better understand the products and services offered. Indian HNWIs have lost faith in their current advisors after the recent downturn, which has eroded their wealth drastically. HNWIs in India presents unique trends in terms of their attributes, selection of wealth manager, concentration in Tier I and Tier II cities.
Among the different institutions operating in India wealth management industry is largely dominated by banks such as the top three players are ICICI, HDFC, and Kotak. Players such as HSBC and Standard Chartered are also making their presence felt not only through geographical expansion but also by improving products and technology.