Advisors and agents will soon have more business coming their way as investors will pour in a major part of their fortunes in equities, mutual funds and insurance.
“Assuming 60% of household savings shift to financial saving, of this 40% flow into capital markets, mutual funds and insurance, this could result in USD 600 billion of flows over the next 5 years, compared to USD 200 billion over the last 5 years an increase of nearly 3x,” said the report titled, ‘Opportunities from the reset in Financial Services Sector in India’, published by Ambit Corporate Finance.
The report highlighted the on-going trend in the financial services industry as investors shift their savings from physical assets to financial assets.
According to the report, capital markets will see more inflows as the century old gainers like real estate and gold have been delivering lower returns. Besides, declining interest rates have made bank deposits less attractive for investors.
To help banks retain their clients, the report has suggested banks to work on a product with the help of asset management companies (AMCs) and insurance companies.
Cafemutual sought the views of a few financial planners who confirmed the on-going savings shift to financial instruments. Most of them said that many investors are now liquidating their money from bank deposits and physical assets and investing them in mutual funds and insurance due to their attractive returns and tax-saving nature.
