As the economy continues to walk the drastic turn it has taken, the definition of wealth keeps on changing. With increased financial insecurities, most individuals are gravitating towards taking a leap from down and middle-income groups to upper-middle and higher-income groups.
Instead of living from paycheck to paycheck, people are looking for diversifying investment options to create steady long-term wealth along with alternate income sources. This has given rise to an increasing requirement for wealth management in India.
The wealth management sector has been undergoing a major metamorphosis. Some trends have been emerging that are clearly going to shape up wealth management in India. Let’s take a look at some top trends.
1. An Explosion of Digitalization
Gone are the days when everything was tangible. The constant hassle of excessive paperwork was the prime reason why keen investment enthusiasts limited their wealth-building potential in the past.
Even though digitalization has made wealth management highly accessible, not everyone has the technical know-how to deal with it. Even those wealth managers who used to deal in traditional ways before are coming forward to adopt and embrace technological advancement and are going through the digital learning curve.
Online Demat accounts have revolutionized investing in different asset classes. Centralized management of assets has been constantly benefiting with digitalization that’s raising the bar for wealth management in India.
Nowadays, there is no need to fill out lengthy forms for making an investment. All you need is a click on the mouse or a top of the thumb with some expert advice. Most wealth managers have been recognizing the increasing requirement for upgrading technologies and shifting to offering a wide array of online investment solutions.
The best thing about having important investment information stored online is that both investors and wealth managers don’t need to worry about accidental disasters destroying important records. No one has to worry about saving stock certificates when an online demat account stores everything you need in electronic storage.
Our CEO Ranjit Jha is keen on fin-tech and believes that it can revolutionize the industry considering the immense scope that India offers. For instance, Rurash offers hassle-free & complete digitized options for NRIs to invest in the Indian market.
Rurash offers the NRI investment services on click of a button.
2. Goal-based Wealth Planning Replacing Fund Accumulation
The modern generation has almost realized that keeping 100% of their money in a savings account means putting their funds to sleep. Wealth management in India is now about having a diversified investment portfolio besides some savings. Depending on inflation, spending patterns, and expected returns, people want to set a goal and plan their savings and investments accordingly.
There was a time when traditional asset classes ruled. But now, people have been exploring beyond conventional products like bonds and fixed deposits. Today, the investors are tapping the lucrative high return products like private equity, unlisted equity, mutual funds, real estate, Crypto, structured products, International funds and so on. Even these categories have further subcategories for diversification. For instance, Rurash offers Equity schemes, hybrid schemes, debt schemes, ELSS, and ETFs so that investors can further diversify their investments.
If someone is investing in a certain mutual fund, they need to know metrics such as performance over the past few years and the companies and bonds it includes along with the fund managers and research team. The increasing vigilance of investors towards where their money is going has made it mandatory for wealth managers to be more transparent with their clients.
3. Rising Importance of Customer Experience
Since wealth management in India is undergoing a massive change, the competition in this market is going to be fierce. A combination of financial knowledge and a great customer-advisor relationship will win.
Most wealth management companies are simplifying financial planning and investment for their clients and are striving to fulfill their expectations. They are constantly coming up with personalized wealth custodians and customized investment plans for meeting the needs of different clients.
Rurash assigns customized Wealth Custodian to every financial account they manage whether they are domestic or NRI segments.
4. Higher Complexity Level and Unpredictability of Financial Markets
It’s no secret that the volatility of financial markets has been on the rise after the pandemic hit across the globe. Since India is a developing economy, wealth managers know how to mitigate the effects of massive volatility with long-term investment products.
This increases the need for wealth management in India as even seasoned investors find themselves vulnerable to increased financial complexities,uncertainties and technical expertise. Therefore, Rurash helps customers diversify their portfolio after a thorough assessment of their risk aversion along with investment goals. This enables investors to stay invested even during the most extreme market volatilities.
5. Increased Sense of Independence Among Millennials
Most millennials dream of retiring young and rich. Unlike previous generations, they rarely feel the need to rely on their children for support during their old age. With nuclear lifestyles gaining traction, they are looking for long-term investment options trying to curb their need for instant gratification.
However, now that life expectancy has increased, they are also afraid of outliving their wealth. Not to mention, the skyrocketing medical care costs add to their already existing financial stress. While trying to maintain a balance between enjoying various luxuries and creating wealth for the future, they are more than willing to hire professional advisors for wealth management in India.
With a combination of investing in direct equity, unlisted equity, and mutual funds, Rurash enables long-term investors to retire whilst retaining their wealth.
6. Demographic Transition
The demographic transition from older generations to younger ones has been tremendous. It’s a scary situation even for the older generations as most millennials shy away from the concept of dependent parents in old age. This makes the older generations seek both short and long-term investment options with a sense of urgency. Not to mention, unlike ancient times, more women are joining the investment race resulting in dramatically changing the demographic trends.
7. Increasing Personalization
With an increasing fear of recession, more people are building multiple income sources. The rise of the entrepreneurial era has begun. Most millennials wish to be their own boss and generate passive streams of revenue.
The ‘earn more, save less, and invest more’ Mantra has been in Trend for a few years and it’s only going to rise. As sources of income and variations and finances increase, personalization is going to be of extreme importance.
This is another factor that will increase the need for wealth management in India for people from different financial backgrounds. For instance, if someone wishes to invest without an unlimited supply of liquid funds, they prefer starting a SIP in proportion to their income levels.
Everyone has plenty of short-term and long-term investment options at their disposal. However, to take the best pick, it’s important to consult a personal finance expert. Experts at Rurash perform a detailed risk analysis of investors and recommend investment options based on each individual’s financial situation.
We are living in a world where interest rates are declining and debts are rising. The most unfortunate thing is that the growth in terms of finances is low. Trade wars post-pandemic have intensified uncertainty and amplified challenges.
By now it’s pretty obvious that the wealth management industry has been witnessing significant paradigm shifts. This makes it essential to get a hang of complexities, servicing, technology and accessibility.
On the other hand, the current nature of the market makes it important for investors belonging to any financial class to seek assistance from expert wealth managers. It’s high time we realize that investments are no longer optional. To maintain and upgrade standards of living as well as having a safety net for emergencies calls for improved wealth management in India and across the world.