India’s wealth management industry poised for a US$1.6 trillion AUM growth opportunity over FY24–29: Deloitte report

National, 21 January 2025: Deloitte India’s latest report, “Financial Wealth Management Services in India” estimates a remarkable US$1.6 trillion AUM growth opportunity for wealth management service providers between FY24 and FY29. The growth is attributed to shifting macroeconomic trends, rising income levels and changing investment behaviours across customer segments. The report estimates that demand for wealth management services in terms of assets under management (AUM) will almost double, climbing from US$1.1 trillion in FY24 to US$2.3 trillion by FY29.The report underlines significant unmet demand for wealth management services. Of the US$1.1 trillion financial wealth held by affluent households in FY24, it is estimated that US$0.4 trillion will remain self-managed/informally managed. By FY29, the wealth of these affluent households is expected to surge to US$2.3 trillion, creating substantial opportunities for both established players and new entrants in the sector.

The report highlights the following:

• Expanding affluence: India’s affluent population, bolstered by GDP growth, increased foreign direct investments, FDI and the start-up ecosystem, is set to drive the demand for wealth management services.
• Shift to financial assets: Indians are transitioning from physical assets to financial products, evident by a 16 percent annual growth in mutual fund AUM from FY17 to FY24.
• Emerging opportunities in B30 cities: Demand is no longer confined to Ultra-High-Net-Worth (UHNI) and High-Net-Worth Individuals (HNI) in Tier-30 (T30) cities. The contribution of affluent customers in Beyond Tier-30 (B30) to total mutual fund AUM and their contribution to total retail deposits indicates a huge untapped opportunity from a wealth management perspective.

The report describes the competitive landscape for financial wealth management services in India. It highlights, among other things, the following key success factors for the profitable growth of a wealth management business in India:

• Define target customer segments (UHNI, HNI and affluent) and offer tailored products.
• Monitor existing and changing regulations to ensure compliance.
• Deliver performance-linked pricing models and superior digital user experience.Use modern technology stacks for operational efficiency and client engagement.
• Provide tax optimisation and integrated wealth solutions to address sophisticated client needs.
• Follow a multi-sided platform approach for this business.