India's Top 1% Invest 60% of Wealth in Real Estate and Gold
According to a report by American wealth management firm Bernstein, the top 1% of India's richest people have invested 60% of their wealth in real estate and gold. This category of 'wealthiest citizens' includes Ultra High Net Worth Individuals (UHNI), High Net Worth Individuals (HNI), and the wealthy class, who constitute only 1% of Indian families but control about 60% of the country's total wealth.
The report states that this class has a total wealth of $11.6 trillion. India's total household wealth is estimated at $19.6 trillion, of which $11.6 trillion or 59% is held by this class of population. Of this, only $2.7 trillion is invested in serviceable financial assets that can be actively managed or reallocated, such as mutual funds, equity, insurance, and bank or government deposits. The remaining $8.9 trillion is invested in non-serviceable assets, which include gold, cash holdings, promoter equity, and physical real estate.
The report highlights the immense potential for asset management firms to grow their Assets Under Management (AUM) over the next decade as India's affluent class seeks ways to diversify their portfolios beyond gold and real estate. The report notes that this wealth segment has low access to formal wealth management services, and a large portion of financial assets remain unmanaged. In its previous report, Bernstein had observed that specialized wealth managers currently account for just 11% of India's liquid financial asset pool.
There are about 35,000 UHNIs in India whose net worth is more than $12 million (Rs 100 crore). The average wealth value of these households is $54 million (Rs 472.5 crore), including financial assets worth $24 million (Rs 210 crore). This underscores the significant wealth concentration and the potential for wealth management firms to tap into this market.
As the Indian economy continues to grow, the affluent class is increasingly looking for ways to diversify their investments to ensure long-term wealth preservation and growth. This trend presents a golden opportunity for wealth management firms to offer tailored solutions and services that can help these individuals manage and grow their wealth more effectively.
In conclusion, the report by Bernstein provides valuable insights into the investment patterns of India's wealthiest individuals and the untapped potential for wealth management services. As the country's economic landscape evolves, the demand for professional wealth management is likely to increase, benefiting both the affluent class and the financial services industry.
