Till recently, companies were targeting the high net worth individuals (those who have invest able assets more than rupees five crore or $1 million); but the focus is now shifting towards Ultra high net worth individuals or families (those who have invest able assets more than rupees 45 crore or $10 million)
Indian Ultra-HNWIs have unique demands in terms of products and services. Ultra-HNWIs have high risk taking abilities as compared to HNWIs. Thus, the products offered to them are more sophisticated and risky. Due to high invest able base and diversified needs, they also require more customized and tailor-made services to manage their family needs as well as grow their wealth.
The market provides huge opportunity in terms of low penetration (20%) of Ultra high net worth individual and also the huge amount of intergenerational transfers is going to change hands in the coming decade. The amount is estimated to be around 5.78 lakh crore ($128 billion)
Many established firms which are already into this segment are Kotak bank, DSP Merrill lynch, BNP Paribas but it has also given rise to boutique firms which have a market share of around 47% in the family office space. It includes firms such as Altamount capital, client associates.
This chapter talks about Ultra- HNWIs and families in India. It also talks about the emergence of family offices in India. It deeply analyzes the segregation advisory services on the basis of wealth in India.
This section analyzes the various products and services offered to Ultra HNWIs and families in India. It talks about the opportunities the Ultra-HNWIs present to the industry players. Various drivers that are affecting the family offices in India and the forecast of family offices on the basis of various factors are also explained.
This section discusses in detail the process of intergenerational transfer taking place in the coming decade.
Needs and behavior analysis of Ultra-HNWIs
This chapter provides in-depth analysis on various needs and behavior of Ultra-HNWIs in India. Behavior analysis is done on various parameters such as risk appetite, decision making power, knowledge of financial products.
This section discusses the various players in the wealth management industry and their market share. It also talks about various trends in the family offices, players involved, and the qualifying amount for availing the family office services in India.
This section describes companies offering wealth management and family offices services in India, and includes 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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With the economy back on rising trend, growth of new segment of wealthy individual known as Ultra-HNWI (High net worth individuals) which are also considered as Nouveau rich is prominent. The need for managing family issues through a professional organization like family office is rapidly growing in India with various players such as banks, brokerage firms, asset management firms gaining a foothold in the Indian family office space.
Ultra HNWIs or families have some unique needs apart from investment and wealth maximization needs. They have started thinking about business continuity, succession planning, and corporate governance, handling sibling rivalry, drafting a trust, philanthropy and legacy planning and for this, they are now seeking advice from experts or dedicated family offices.
As they have higher risk appetite, equities and real estate products are most favored destination for their investment. Financial and tax planning is the important need for setting up family office by Ultra high individual and philanthropy is the next important services that is demanded by Ultra-high families.
Globally, the minimum qualifying amount of invest able assets is around $50 million to $100 billion but it varies from country to country and company to company. In India, various companies have their own qualifying amount for providing service. Client associates have set it to minimum of Rs. 10 crore for the service while Kotak with international firms DSP Merrill lynch and Barclays have a minimum amount of Rs. 100 crore.
Many established firms which are already into this segment are Kotak bank, DSP Merrill lynch, BNP Paribas but market upswing has also given rise to boutique firms which have a market share of around 47% in the family office space. It includes firms such as Altamount capital, client associates.
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 ULTRA HIGH NET WORTH INDIVIDUAL (ULTRA-HNWI) OR FAMILIES
2.2 ECONOMIC FACTORS AIDING GROWTH OF ULTRA HNWI IN INDIA
2.2.1 REAL GDP GROWTH RATE
2.2.2 HOUSEHOLD SAVINGS RATE
2.2.3 DEPOSIT INTEREST RATES
2.2.4 REAL ESTATE BOOM
2.2.5 DOMESTIC MARKET CAPITALIZATION
2.3 SEGREGATION OF ADVISORY SERVICES
2.4 FAMILY OFFICES IN INDIA
2.4.1 SINGLE FAMILY OFFICES (SFOS)
2.4.2 MULTIPLE FAMILY OFFICES (MFOS)
3 MARKET DYNAMICS
3.1 PRODUCTS & SERVICES OFFERED TO ULTRA-HNWI IN INDIA
3.1.1 EQUITY IS THE MOST PREFERRED INVESTMENT IN INVESTMENT RELATED SERVICES
3.1.2 FINANCIAL & TAX PLANNING MOST PREFERRED IN FINANCIAL ADVISORY SERVICES
3.1.3 PHILANTROPHY IS THE MOST PREFERRED SERVICE IN OTHER PROFESSIONAL SERVICES
3.2 UNTAPPED OPPORTUNITY
3.3 ANALYSIS OF DRIVERS & FORECASTS
126.96.36.199 Increasing number of ultra high net worth individual
188.8.131.52 Increasing number of family owned business
184.108.40.206 Business income contributes the maximum
3.3.2 FORECAST OF FAMILY OFFICES
3.4 WINNING IMPERATIVES
3.4.1 INDEPENDENT FAMILY OFFICE
3.4.2 TARGET THE RIGHT DECISION MAKERS
4 INTER-GENERATIONAL TRANSFERS
5 ULTRA-HNWIS IN INDIA: NEEDS, BEHAVIOR & TRENDS ANALYSIS
5.1 NEEDS & BEHAVIOR ANALYSIS
5.1.1 ULTRA HNWIS GIVE HIGH IMPORTANCE TO ADVICE
5.1.2 ULTRA HNWIS PREFER ACTIVE INVESTMENTS
5.1.3 HIGH KNOWLEDGE OF FINANCIAL PRODUCTS
5.1.4 CUSTOMIZED & TAILORED OFFERINGS
5.1.5 PATRIARCH OR SENIORMOST MEMBER RETAINS POWER FOR DECISION MAKING
5.1.6 CONFIDENTIALITY & INDEPENDENT ADVICE ARE THE MAIN REASONS TO GO FOR FAMILY OFFICE
5.1.7 INDIAN WEALTHY FAMILIES ARE MORE PRICE SENSITIVE & HAVE LESS PRODUCT KNOWLEDGE COMPARED TO WESTERN COUNTERPARTS
5.1.8 HIGH RISK APPETITE
5.2 TREND ANALYSIS OF ULTRA-HNWIS IN INDIA
5.2.1 FAMILY GOVERNANCE IS THE IMPORTANT CRITERION FOR SETTING UP OF FAMILY OFFICE IN INDIA
5.2.2 IMPORTANCE OF TRUST IN ESTABLISHMENT OF FAMILY OFFICE IN INDIA.
5.2.3 MUMBAI HOUSES MOST WEALTHY FAMILIES IN INDIA
6 COMPETITIVE LANDSCAPE
6.2 MARKET SHARE ANALYSIS
7 COMPANY PROFILES
7.1 HONGKONG AND SHANGHAI BANKING CORP LTD
7.1.3 PRIMARY BUSINESS
7.2 KOTAK MAHINDRA BANK
7.2.3 PRIMARY BUSINESS
7.3 STANDARD CHARTERED LTD
7.3.3 PRIMARY BUSINESS
7.3.4 WEALTH MANAGEMENT BUSINESS
7.4 RELIGARE MACQUARIE PRIVATE WEALTH
7.4.3 PRIMARY BUSINESS
7.5 BARCLAYS BANK PLC
7.5.3 PRIMARY BUSINESS
7.5.4 WEALTH MANAGEMENT BUSINESS
7.6 BNP PARIBAS WEALTH MANAGEMENT
7.6.3 PRIMARY BUSINESS
7.6.4 WEALTH MANAGEMENT BUSINESS
7.7 DSP MERRILL LYNCH
7.7.2 PRIMARY BUSINESS
7.7.3 WEALTH MANAGEMENT BUSINESS
7.8 ALTAMOUNT CAPITAL MANAGEMENT PVT.LTD.
7.8.2 PRIMARY BUSINESS
7.8.3 WEALTH MANAGEMENT BUSINESS
7.9.1 CLIENT ASSOCIATES
7.9.2 JM FINANCIAL
LIST OF FIGURES
1 INDIA ‘S GDP GROWTH RATE (2005 – 2015)
2 HOUSEHOLD SAVINGS RATE: INDIA (2005 – 2015)
3 DEPOSIT INTEREST RATES (2005 – 2009)
4 RESIDENTIAL PROPERTY INDEX
5 DOMESTIC MARKET CAPITALIZATION
6 SEGREGATION OF ADVISORY SERVICES ON THE BASIS OF WEALTH
7 WEALTH ADVISORY SERVICES & ITS FEATURES
8 TYPES OF FAMILY OFFICES IN INDIA
9 FAMILY OFFICE SERVICES
10 INVESTMENT ALLOCATION OF ULTRA HNWIS (2010)
11 FINANCIAL ADVISORY SERVICES OF FAMILY OFFICES
12 OTHER PROFESSIONAL SERVICES OF FAMILY OFFICES
13 PERCENTAGE SHARE OF UNTAPPED MARKET IN INDIA (2010)
14 ULTRA-HNWIS IN INDIA (2006 – 2010)
15 BSE LISTED FAMILY OWNED BUSINESSES (2006 – 2010)
16 SOURCE OF WEALTH ACCUMULATION
17 GROWTH OF FAMILY OFFICES IN INDIA (2006 – 2015E)
18 RELATIVE IMPORTANCE OF TRANSFER OF WEALTH
19 TRANSITION OF WEALTH ACROSS GENERATIONS
20 IMPORTANCE OF ADVICE ACROSS WEALTH SPECTRUM
21 INVESTMENT STYLE OF ULTRA-HNWIS
22 KNOWLEDGE OF FINANCIAL PRODUCTS
23 LEVELS OF CUSTOMIZED OFFERINGS
24 CONCERNS OF INDIAN ULTRA HNWIS
25 PREFERENCES OF INDIAN & WESTERN ULTRA-HNWIS
26 ULTRA-HNWIS: COMPARISON OF RISK APPETITE
27 CRITERIA FOR OPENING A FAMILY OFFICE IN INDIA
28 RESTRAINTS IN SETTING UP A FAMILY OFFICE
29 PERCENTAGE OF WEALTH IN INDIAN CITIES (2010)
30 STRUCTURE OF WEALTH MANAGEMENT INDUSTRY
31 MARKET SHARE OF WEALTH MANAGEMENT COMPANIES
32 MARKET SHARE OF FAMILY OFFICES & BOUTIQUE FIRMS
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