The Role Of Wealth Management In India

Wealth Management services in India are in great demand as there is a great rise in the number of Indians looking to join the millionaires’ club. The factor making it possible is all due to the rise in each individual’s income levels and initiative to make it big all by themselves. 

You will want to know what does it have to with wealth management? The huge amount of money they earn will require proper management as they cannot do it by themselves. That is when there is a need to use the services like wealth management for proper management of the wealth. Unfortunately, many people are not aware of what wealth management is all about. It is advice given to individuals for looking after a person’s financial well-being. The wealth management services get offered with two goals in mind, and they are looking after the growth opportunity and good safety with their investment. 

Different types of wealth management services providers

In India, the focus is on three different wealth management service providers: brokerage firms, banks, and advisory firms. 

Brokerage firms: The purpose of brokerage firms is to focus on investing the customers’ money in the shares, mutual funds investment, and IPOs, as they are the equity market products for investing. 

Banks: Banks have a bigger appetite and a greater distribution model for managing investment. They do not look after a single investment option but look after a large investment portfolio

Advisory firms: Their focus is to provide customized solutions to the client’s finances. 

Outlook of wealth management in India

Several enterprises have created an ever-growing high net-worth individual. As a result, there has been a great rise in the number of High networth individuals leading the wealth management industry. It is the most preferred career choice of the masses. The wealth management industry is growing at such a fast pace only for two reasons: it is helping bring about a change in the regulatory environment, and there is a rise in the competition levels. 

After seeing the growth, many companies are very keen to set up and start their wealth management company and set up in India for many years. Moreover, those companies in financial services are also looking to expand their wealth management services.

Banks started working by selling insurance and looking for mutual funds investment for selling to individuals. At that time, advisory services were not present, and the institutions did not charge any money. But after seeing the new changes coming in place, this sector has found a great new source of income. 

Several financial advisory services and banks are offering wealth management services and looking for ways to attract customers to their wealth management services. Due to these reasons, several wealth managers are available from whom customers can look to take the best wealth management services for themselves. 

The process will continue for a longer duration as India is on the path to becoming a growing economy in the year 2030. In addition, the changes in the regulations and the tax structure will present many opportunities for wealth managers to help multiply their offerings of the product. 

Growth and size of wealth management in India

If the overall wealth of high networth individuals get considered, it will be a small portion looking at the other established markets. But looking at the wealth is bound to grow by big numbers in the years to come. As per the study, India will become the fastest-growing market for wealth management. So there is a great rise in the number of liquid assets, and it will show a great increase in the individual’s overall wealth. 

The scope for wealth management is immense, and it is poised to grow at 25%. As per the data, the High networth individuals fall between the age group of 30 to 35 and are looking for quality wealth management services to help them increase their wealth. 

India is the main focus country. Many developed nations are looking for tremendous growth opportunities in the wealth management sector as they will become one of the greatest economies in the times to come. 

One of the important factors is that looking at the growth of wealth management sectors will see a loss of many unorganized players in the market. Unorganized players are like brokers, advisors, and small agents.

Also, many wealth management firms are looking to offer their customized services to NRI clients. It can bring about a great change in the wealth management sector in India as the market for the NRI is huge.

Number of challenges in the wealth management

 Location issues: One of the important challenges wealth managers face is having a great location but having to pay a good price for the property. The rapid rise in real estate has made it difficult for wealth managers. More importantly, having their location for wealth managers is very important as they require a physical location to connect with clients in build quality relationships. 

Less financial knowledge: Many people have very less knowledge related to the financial products in the market. Investors are very worried due to the high rise of scams in the country. There is no protection for the investors, so they are worried about investing in any market easily. It has resulted in not having such a great view of the investor’s wealth which is not very long term. 

Regulations: It comes to notice that the regulatory environment is still very much growing, and there are a lot of roadblocks along the way. One of the great reasons for the wealth managers not focusing on the new innovative products is the number of measures laid down by the regulators in India. Compared to equity markets, there is no better growth happening for any other form of market. 

Conclusion

Wealth Management services are one field that is growing at a faster pace as the economy is also advancing at great speed. As per the latest trends, it is clear that there are many opportunities ahead in the Indian market

Saurabh Chaudhary
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