Evolving Landscape of Wealth Management Industry
Published by Sharekhan Education | April 15, 2024
By Amit Pathak | Sharekhan Education
Evolving Landscape of Wealth Management Industry
About Wealth Management Companies:
Wealth management companies in India are offering a wide range of investment products & services to cater to the diverse needs and risk appetites of their clients. These include stocks, bonds, mutual funds, alternative investments, real estate, and structured products. There has been a gradual improvement in financial literacy among Indian investors, leading them to seek out professional advice for managing their investments.
Growth Prospects:
The wealth management space presents significant opportunities for growth in India. Individual tax filers with a gross income of more than Rs 10 million have grown at 18% CAGR in the last decade vs. the total tax filer CAGR of 10%. No. of HNIs (a person with > USD 1 million in liquid financial assets) have grown at a CAGR of 21% in the last 5 years. Strong growth in wealth financial assets has taken place in Tier 2/ 3 markets vs. top ten cities.
About 360 One Wam:
Let us discuss 360 ONE WAM in this space. The company is the poster boy of the wealth management industry in India. They are focused mainly on the UHNI segment where the investable surplus is more than Rs 250 million. Low client attrition in this segment makes AUM sticky. They aim to boost profitability by expanding AUM aggressively, increasing wallet share among existing clients, adding RMs, branching into tier 2/3 towns, converting non-recurring assets into recurring AUM, scaling AMC AUM with varied strategies, and introducing new options from Mid-Market and Global business propositions. As per the latest brokerage report, analysts expect the company to achieve a 21% CAGR in AUM and a 17% CAGR in PAT from FY24 to FY26. This should translate into a healthy ROE of 27.5% by FY26E. The company is emerging as a key beneficiary of the financialization of savings trend in India.
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