The Wealth Index report, developed by 360 One Wealth—a leading wealth management firm specializing in the investment behaviors of high-net-worth individuals—in partnership with the analytics and ratings agency CRISIL, was released on Tuesday.
This report analyzes the investment behaviors, preferences, and wealth management practices of India’s ultra-high-net-worth individuals (UHNIs) and high-net-worth individuals (HNIs), revealing intriguing insights into how the wealthy manage their finances.
The survey covered 388 UHNIs and HNIs, providing detailed information on their investment strategies and preferences. According to the report, India’s billionaire population is expected to reach 334 by 2024, with Mumbai emerging as Asia’s "billionaire capital" and claiming the title of the third-largest city globally. Rapid wealth creation is expected in sectors such as fintech, e-commerce, space, and defense, highlighting India’s strong economic growth trajectory.
“The Wealth Index offers strategic insights for wealth management as India’s economy continues its rapid growth,” said Karan Bhagat, founder, managing director, and CEO of 360 One.
The report explores various facets of the wealth management process, including succession planning, involvement in philanthropy, the influence of global events, and professional wealth management practices. It reveals that most wealthy individuals rely on advisors to manage their assets, with 77% of survey respondents seeking professional wealth management services.
Key Insights on Investment Behavior and Philanthropy
The study found that 82% of wealthy respondents are currently engaged in philanthropic activities, with many planning to increase their involvement over the next two years. Among UHNIs aged 60 and above, the inclination toward philanthropy is especially strong. Furthermore, 86% have either started or completed estate planning, highlighting a focus on legacy and wealth preservation.
Notably, 68% of affluent investors prioritize environmental, social, and corporate governance (ESG) principles, emphasizing responsible and sustainable investing. Within the 51-60 age group, over 40% of women prefer low-risk and sustainable investments, reflecting a nuanced approach to wealth management.
Shifting from Traditional to Alternative Investments
The report indicates that UHNIs and HNIs are increasingly diversifying beyond traditional assets. Many are turning to alternatives such as Portfolio Management Services (PMS), Alternative Investment Funds (AIFs), Real Estate Investment Trusts (REITs), and private equity. ESG considerations are central to these strategies, reflecting a trend toward conscious and sustainable investing.
About 90% of respondents expressed concern over the impact of global events on their wealth, although this concern was less prevalent among those over 60 compared to younger individuals under 40. UHNIs were found to be more sensitive to external factors than HNIs, with a preference for stocks, mutual funds, and fixed-income securities.
Professional Guidance in Wealth Management
A significant portion of respondents, 77%, rely on professional advisors for investment management, with 24% depending entirely on professionals. Additionally, 44% use both consulting and product selection services. This reliance on experts underscores the importance of professional guidance in managing complex portfolios, legacy planning, and navigating market fluctuations.
Older Investors Are Bold in Wealth Growth
Challenging the assumption that older investors are more conservative, the report finds that respondents aged 60 and above prioritize capital growth over wealth preservation, with a preference for equity investments. For 39% of respondents, gold remains a top choice for portfolio diversification, followed by debt and real estate investments. Gold is viewed as a safe and reliable asset for wealth security.
While only 41% of respondents expressed interest in investing abroad, UHNIs showed greater inclination toward international investments than HNIs, reflecting a broader approach to wealth expansion and social impact.
The Wealth Index report offers a detailed perspective on the financial habits of India's wealthy, highlighting a shift toward alternative assets, a strong focus on ESG principles, and an increased engagement in philanthropy among high-net-worth individuals. -- Agencies
