Listen to this article
A report released by Deloitte reveals that the top 4-5% of Indian households currently hold USD 1.10 trillion in wealth. The report says that this figure will rise to USD 2.30 trillion by 2029. This growth will come from GDP expansion, increased FDI inflows, Make in India scheme, startup growth and inheritance of family wealth.
Further, Indian wealth management services, which includes distribution channels like banks, wealth managers, family offices, RIAs and MFDs are set to see a significant growth in the coming years.
The report estimates that the distribution channels are likely to manage to AUM of USD 1.60 trillion by FY29. For reference, India's current GDP stands at USD 3.55 trillion.
PMS has already seen their AUM grow from USD 149 billion to USD 405 billion from FY17 to FY24. This shows rising investor awareness in India. The mutual fund industry has also grown well. The AUM increased from USD 226 billion in FY17 to USD 651 billion in FY24, growing at 16.2% annually. But India's mutual fund market is still developing. The AUM-to-GDP ratio is only 16%, much lower than US (140%), Brazil (72%), and China (23%). Deloitte says this shows good growth potential as more Indians start investing.
Deloitte also says that there is currently a gap between demand and supply in wealth management services and this demand will need to be met as the mass affluent continue to grow. These services are crucial for tax planning, especially for mass affluent clients.
Here are some other key points from the report:
- B30 cities have untapped potential for wealth managers
- The working population earning over USD 10,000 grew at 11% yearly.
- Digital offerings will be key in reaching the mass affluent segment
- Broadband connections increased at 15% yearly
- Tax filings for incomes above Rs. 10 lakh grew at 19% yearly
- Term deposits above Rs. 15 lakh saw 44% yearly growth
- Premium housing supply (above Rs. 1.5 crore) expanded at 47% yearly, compared to 17% for overall housing
