As on March 8, India will have 4,990 super rich with assets of over $50 million or Rs.326 crore by 2022, shows the recent Knight Frank Wealth Report 2018.
In end 2017, the number of super rich in India was 2,920. This means, the report predicts an absolute growth of 71% in five years in the number of super rich.
The survey also tracked the investment pattern of this class of investors in India.
Investment follows global pattern
The report shows that there has been a shift in ultra HNIs’ wealth allocation among various asset classes. About 62% of respondents (wealth managers) said that their clients’ allocation to equities increased in 2017. A greater appetite for equities is due to buoyant US markets driven by tax reforms.
The global average exposure to equities in 2017 was 52% while Asia’s exposure to equities was highest at 78%.
Real estate followed equities – 56% of the respondents said that the super rich have increased allocation to real estate. “Some 38% of the wealth managers said that UHNI investors were happy to take more risk,” the report finds.
“Appetite for real estate continues to increase globally, as investors grapple with the global low-yield, low-return environment and show signs of shifting allocations away from some fund types, such as hedge funds,” the report states.
Cryptocurrencies have taken the world by storm and it looks like UHNIs in India have treaded this path cautiously with 21% increasing their exposure.
The ultra HNI also have their share of worries about the future, the report finds.
Concerns relate to succession
One of the concerns of the UHNIs is succession planning. The fear that their children will fritter away their inheritance, the worry that passing on too much, too soon will dampen their offspring’s entrepreneurial spirit, or simply concerns about how to treat siblings fairly, all weigh on their minds.
Globally, only 53% UHNIs had a robust succession plan.
“Given the complexity, wealthy individuals would benefit from identifying clear objectives for the future and drawing up a well-defined succession plan. In a world where regulation is constantly evolving, it is essential that global families are aware of the key issues and start planning as early as possible with advisers who can help to make the process as smooth as possible,” the report stated.
