India’s Wealth Management Industry Poised to Hit $1.6Trn by 2029 Amid Shifting Macroeconomic Trends

India’s wealth management industry is set for a $1.6trn f assets under management (AUM) growth opportunity over FY24–29, said a latest report by Deloitte India. The “Financial Wealth Management Services in India” report attributed this growth to shifting macroeconomic trends, rising income levels and changing investment behaviours across customer segments.

The report also estimates that demand for wealth management services in terms of AUM will almost double from $1.1trn in FY24 to $2.3trn by FY29.

"Success in terms of growth and profitability will require a different approach from the past, i.e., there is a need for a sharper understanding of the customer, better tailoring of products for varying segments, hybrid operating models that blend technology powerfully with Relationship Manager [RM] talent and a keen eye on regulatory compliance,” said Vijay Mani, Partner, Banking and Capital Markets Leader, Deloitte India.

Of the $1.1trn financial wealth held by affluent households in FY24, the report estimated that $0.4trn will remain self-managed/informally managed. It is further projected that by FY29, the wealth of these affluent households will surge to $2.3trn, creating substantial opportunities for both established players and new entrants in the sector.

Amid the competitive landscape for financial wealth management services in India, the survey highlighted various factors for the profitable growth of a wealth management business. These include defining target customer segments and offering tailored products, delivering performance-linked pricing models and superior digital user experience and providing tax optimisation and integrated wealth solutions to address sophisticated client needs.

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Competitive Dynamics

Private banks and wealth management companies are increasingly pushing new services catering to the High Networth Individuals (HNIs).

IndusInd Bank unveiled a specialized program on August 1 last year, catering to the "discerning financial journeys" of ultra-high-net-worth individuals (UHNWIs). The initiative addresses diverse needs, including estate and legacy planning, trade and forex services, tailored insurance solutions, and exclusive lifestyle privileges for the high-net-worth individual (HNWI) segment.

The Economic Times has reported earlier that Swiss bank UBS Group AG is also exploring various partnership options for wealth management in India to tackle the intensely competitive environment.

Reportedly, UBS, which exited India’s onshore wealth business about a decade ago, has been integrating the Credit Suisse team it acquired to make a comeback.