60% of India's Ultra-Rich Wealth Invested in Real Estate and Gold, Reveals Report

Mumbai: A recent study by Bernstein, a prominent research firm, has revealed that around 60% of India’s ultra-rich wealth is still invested in real estate and gold. The ultra-rich category includes Ultra High Net Worth Individuals (UHNI), High Net Worth Individuals (HNI), and the affluent class, as reported by ANI.

The report states, “The ultra-rich own approximately $2.7 trillion in serviceable assets, with about 60% of this wealth still parked in real estate and gold.” According to the data provided in the survey report, India’s total household assets are valued at $19.6 trillion.

Out of this, $11.6 trillion, which is 59%, is held by the top wealth bracket or the ultra-rich. These individuals account for just about 1% of Indian households but hold 60% of the total assets and 70% of the financial assets in the country.

Of the $11.6 trillion held by the ultra-rich, only $2.7 trillion is considered to be in serviceable financial assets like direct equity, mutual funds, insurance, and bank or government deposits. This $2.7 trillion is defined as the “Serviceable Addressable Market (SAM)” for wealth managers. This segment of financial assets can be actively managed, advised on, or invested.

The remaining $8.9 trillion is parked in non-serviceable assets such as physical real estate, gold, promoter equity, and currency assets. These areas are traditionally not managed by wealth managers or are harder to reallocate easily.

The report also indicates that there are around 35,000 UHNI households with a net worth of over $12 million. These households have an average income of $4.8 million and average assets of $54 million.

The study highlights a significant opportunity for Indian wealth managers, especially in servicing the country’s ultra-wealthy households. It points out that income disparity in India is significant, with wealth disparity being even more pronounced. The top 1% earns 40% of all income, while the bottom majority holds a very small portion of both income and assets. Only 10% of Indians, or roughly around 150 million, are part of India’s consumption class, the report claims.

This disparity presents both challenges and opportunities for the financial and real estate sectors in India. While the ultra-rich continue to invest heavily in traditional assets like real estate and gold, there is a growing need for innovative financial products and services to cater to this segment and to address the broader economic inequalities.