{"id":7596,"date":"2022-06-01T07:09:00","date_gmt":"2023-06-06T07:09:13","guid":{"rendered":"https:\/\/www.salesforce.com\/?p=7596"},"modified":"2023-07-21T05:16:10","modified_gmt":"2023-07-21T05:16:10","slug":"7-trends-wealth-management-industry-india","status":"publish","type":"post","link":"https:\/\/www.salesforce.com\/in\/blog\/7-trends-wealth-management-industry-india\/","title":{"rendered":"The 7 Biggest Trends Shaping Wealth Management in India"},"content":{"rendered":"\n

India\u2019s wealth management industry is at an inflection point. The affluent middle class is expanding, with nearly 80% of households predicted to be middle-income by 2030<\/a>, up from about 50% in 2019.<\/p>\n\n\n\n

Meanwhile, the country\u2019s high net worth individual (HNI) population is expected to grow by 75%<\/a> from 3.5 lakhs in 2020 to 6.11 lakhs in 2025. Ultra high net worth individuals (UHNIs) are predicted to grow by 63% in the same period.<\/p>\n\n\n\n

This economic maturity has also been accompanied by emotional maturity of the investors. For instance, even when COVID-19 upended markets, most of the investors focused more on recalibrating rather than panicking and exiting their portfolios. India actually saw a record 14.2 million new demat accounts being opened in FY21 alone.<\/a><\/p>\n\n\n\n

These shifts are creating exciting new opportunities for wealth management firms. As your business capitalises on them, here are seven interesting trends to watch:<\/p>\n\n\n\n

1. Investor demographics are shifting<\/b>: The new generation of Millennial and Gen Z investors are digital-first and always connected. They want to be able to engage with financial advisors in real time across channels – be it video chat or text messages. They also expect 24\/7 access to portfolio data and investment opportunities. Winning the loyalty of this cohort requires re-imagining traditional investment ecosystems as those which are more tailored to their needs.<\/p>\n\n\n\n

2. The future of wealth management will be hybrid – a blend of physical and digital<\/b>: Human connections and personal relationships have been the bedrock of the wealth management industry \u2013 and will continue to be so. Customers still want to be met with empathy, transparency, and warmth. But they\u2019re also looking for faster, more convenient, and seamless experiences. Digital solutions like robo-advisors and self-service investment portals will be key enablers. Advisors will also embrace digital tools and process automation to be more productive and respond faster to customer needs.<\/p>\n\n\n\n

3. Alternative asset classes are emerging<\/b>: Millennials are increasingly turning to non-traditional investment opportunities like passive investing, unlisted companies, private equity investing, antiques and collectibles, and most recently, non-fungible tokens (NFTs) and carbon credits. ESG investments are also on the rise. In the past few years, India has launched nine ESG-focused funds<\/a>. This isn\u2019t surprising because young investors care deeply about social and environmental issues. They actively seek out investment options that align with their values.<\/p>\n\n\n\n

4. Regulatory scrutiny is on the rise<\/b>: Regulators like the Securities and Exchange Board (SEBI) of India are paying closer attention to advisory firms\u2019 fee models, data security and privacy practices, AI\/ML adoption, crypto-assets, and ESG (environmental, social, and governance) funds. Taxes are also expected to rise – a major concern for investors. Advisory firms will need to be proactively prepared with a strong compliance program and system of controls.<\/p>\n\n\n\n

5. \u2018Financialisation of savings\u2019 is picking up speed<\/b>: Historically, 95% of India\u2019s household wealth<\/a> was stored in physical assets such as real estate and gold. But now, investors are moving away from physical savings to financial savings. They\u2019re more aware that an over-concentration of wealth in non-financial assets can yield negative returns in the face of rising inflation. With a more balanced portfolio-building approach, they can enjoy better returns, as well as better efficiency from a liquidity and contingency planning perspective.<\/p>\n\n\n\n

6. Financial planning is becoming more holistic<\/b>: The new generation of investors is combining financial goals with ethical and life goals. They\u2019re looking for more holistic investment options that include retirement planning, impact investing, estate planning, and social welfare.<\/p>\n\n\n\n

7. Hyper-personalisation is the need of the hour<\/b>: No longer does a one-size-fits-all approach work with investors. They expect curated, contextual and bespoke offerings that are closely aligned with their needs. Whether it\u2019s investment products, marketing emails, or call centre service, every customer touchpoint needs to be personalised to gain customer loyalty and trust.<\/p>\n\n\n\n

What are the implications of these trends? <\/span> <\/h2>\n\n\n\n

Successful wealth management is built on a deep, nuanced understanding of customers. But as we\u2019ve seen in the above trends, customers are changing. And it can be hard to keep track of their financial needs, behaviours, goals, investment portfolios, transactions, and life events \u2013 especially when all this data is scattered across papers, disparate systems, and spreadsheets.<\/p>\n\n\n\n

But what if you had a single source of truth <\/a>that gave you instant access to customer data at your fingertips? How much easier would it then be to communicate with customers, answer their questions with confidence, and guide them to the right investment options?<\/p>\n\n\n\n

On top of that, you could use predictive analytics, AI\/ML, and natural language processing (NLP) to uncover powerful insights about customer behaviour, and personalise every stage of the customer journey. And with omni-channel engagement tools, you could meet customers wherever they want to be met – be it a Facebook Live Q&A session or a WhatsApp chat.<\/p>\n\n\n\n

Employee experiences can also be elevated with digital technologies. For instance, intuitive dashboards can give advisors instant visibility into tasks, leads, opportunities, and other essential data, so that they can plan their day better. Workflow automation will free up their time to be there for customers when they\u2019re needed most. And integration with multiple portfolio management and financial planning tools can help them deliver holistic advice.<\/p>\n\n\n\n

In a nutshell, here\u2019s what digital solutions can help you do:<\/p>\n\n\n\n