Asset Under Management (AUM) of wealth management industry to double to Rs. 1,99,13,400 crore (US$ 2.3 trillion) in next five years: Report

The demand for wealth management services is set to more than double, with assets under management (AUM) growing from Rs. 95,23,800 crore (US$ 1.1 trillion) in FY24 to Rs. 1,99,13,400 crore (US$ 2.3 trillion) by FY29. This significant growth will be driven by shifting macroeconomic trends, rising income levels, and a substantial increase in the number of affluent households. According to a Deloitte India report, there is a notable unmet demand for wealth management services. Currently, of the Rs. 95,23,800 crore (US$ 1.1 trillion) in financial wealth held by affluent households in FY24, approximately Rs. 34,63,200 crore (US$ 0.4 trillion) remains self-managed or informally managed. As wealth continues to grow, opportunities for both established players and new entrants in the sector are expected to surge. 

The shift in asset preferences from physical assets like real estate and gold to financial assets such as mutual funds, equities, and portfolio management services is a key trend. Mutual fund AUM, for instance, has grown at an annualized rate of 16.2% from FY17 to FY24, reaching Rs. 56,36,358 crore (US$ 651 billion). Wealth management firms are increasingly integrating modern technologies like cloud infrastructure, data modernization, and cybersecurity to enhance their offerings. Deloitte India's partner Vijay Mani notes that the industry's growth will require a deep understanding of customer needs, better product tailoring for diverse segments, hybrid operating models combining technology and Relationship Manager expertise, and a strong focus on regulatory compliance to remain competitive and profitable. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.