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A report released by 360One Wealth titled ‘The Wealth Index’ reveals that ultra HNIs and HNIs investors expect their advisors and distributors to have good track record and good reputation in the industry.
The report finds that 25% wealthy investors look at investment performance and track record of a wealth manager before choosing a wealth manager while 17% of them shortlist wealth managers based on their reputation and prestige.
13% of wealthy Indians choose wealth managers based on the fee structure whereas 11% look for holistic services like comprehensive financial planning, tax planning, estate planning and so on.
Among other key criteria to choose wealth managers are existing relationships, investing expertise, global firms having local presence and through referrals.
Here are the parameters that wealthy clients keep in mind while choosing wealth managers:
- 25% of wealthy investors look at investment performance and track record
- 17% sees prestige and reputation of the firm
- 13% looks at fee structure
- 11% searches for holistic services
- 8% likes to work with existing managers who handle their family’s wealth
- 7% looks at domestic investing expertise
- 7% wants to get associated with global firm with local presence
- 5% wants to work with someone through referrals
What do wealthy Indians want?
The report shows that 23% of wealthy Indians seek advisory services from their wealth managers while 21% are comfortable with the selection of products and execution model.
Further, 2 out of 10 wealth investors want to get recommendations on AIFs.
Other key needs of wealthy include:
- 10% of wealthy investors need succession planning
- 9% requires broking services
- 8% wants to work with family office services
- 3% looks at lending solutions/NBFC
- 3% seeks corporate treasury management
How do wealthy Indians make investment decisions?
- 53% of wealthy Indians don’t rely completely on investment advice given by wealth managers. They usually take investment call on their own by including advice from a wealth manager
- 24% completely relies on professional advise
- 12% personally manages their wealth and takes all the decisions themselves
- 11% consults their friends to make investment decisions
Another interesting trend
The report shows that the wealth demographics are constantly changing. Earlier wealth was concentrated among men aged 59 years and above but now the success of new age businesses has created a wealthy class that is in their 20s or 30s.
The preferences and risk capacities of these young wealthy will change accordingly. This means that the wealth managers will also have to change their approach as per the new reality of the investment landscape of the economy.
Methodology
388 wealthy individuals participated in this survey. Of this, 48% individuals are HNIs having net worth of up to Rs.50 crore while 52% individuals are ultra HNIs with net worth of over Rs.50 crore.
