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Fast growing millionaires in India

These days the number of millionaires in India is increasing at the speed of rocket. The situation is that with the speed with which rich people are being born in the country, there is a huge shortage of 'Wealth Managers' who can manage their money and invest it in the right place. In the last five years, there has been a huge jump of 63 percent in the number of Indians with assets worth more than $30 million (about Rs 250 crore). But, the surprising thing is that there are only around 1,900 experienced Relationship Managers (RM) in the country who handle the portfolio of such rich people. This sudden flood of money has created a big crisis for the wealth management companies as to who and how will manage the money of so many new rich.

Crisis of consultants amid tsunami of rich

According to Knight Frank data, in the year 2021, the number of people in India with a net worth of more than $30 million was 12,161, which has increased to 19,877 by 2026. It is estimated that by 2031 this figure will cross 25 thousand. More than 35 percent of the country's ultra-rich population lives in Mumbai alone. The number of billionaires in India is also increasing rapidly. But the real problem is that there are not enough experts available in the market who can provide proper financial advice to these rich people. Even if the number of relationship managers increases to 2,800 by 2028, this pressure is not going to reduce.

Managers are getting huge increments up to 40%

Existing wealth managers are directly benefiting from this shortage of experienced advisors. According to a report by Motilal Oswal, due to talent shortage, banks and private wealth firms are trying hard to poach managers from other institutions. For this, they are giving huge increment of 20 to 40 percent and guaranteed bonus for many years. In fact, it takes 18 to 24 months to train a new person for this job, hence companies are directly hiring experienced people at nominal rates. In the coming times, there will be immense pressure on a single manager to manage an average fund of Rs 4.8 billion.

Where does India's wealth market stand compared to America?

Even though money is increasing in India, the wealth management market is still in its nascent stage. In America, 75 percent of the wealth is managed by professional managers, whereas in India this figure is barely 15 percent. According to Deloitte data, even today about 35 to 40 percent of India's rich families manage their money themselves. But now this trend is changing rapidly. In the next decade, wealth worth 1.5 trillion dollars is going to be transferred from the old generation to the new generation. In such a situation, these rich families should not be limited to just shares or mutual funds, but they need complex options like private equity and foreign investment. For this it is essential to have an expert wealth manager.

Will this problem be solved by digital technology?

India's digital infrastructure has become very strong. There are more than 19.2 crore demat accounts in the country and every month more than $3 billion of investments are coming through SIP. A large population of the country has a strong digital identity and transactions worth $2.5 trillion are taking place annually through UPI. Big wealth management companies like 360 ​​ONE and Nuvama are now taking the help of Artificial Intelligence (AI) to bridge this gap. Although technology can make research and data analysis easier, ultra-rich customers still need the trust of a human being (relationship manager). Technology can certainly increase a manager's ability to work, but it cannot replace it completely.

Vibhav Shukla

Vibhav Shukla is currently working at TV9 Hindi as Senior Sub-Editor on Business Desk. He has six years of experience in journalism. Vibhav is originally from Mau district of Uttar Pradesh. He started his career with Rajasthan Patrika. After this he has been associated with prestigious institutions like Inshorts and Gujarat First.

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