Investments
Driven by a slew of factors, the number of ultra HNIs in India has leapfrogged in the last decade,and so has their wealth.
The average rise in the income of ultra HNIs has been much stronger than that of an average Indian.This rise in income over the past 5 years has been due to ESOPs and other innovative salary structures, strong corporate performances, buoyant capital markets, and the considerable return on investments.
The other aspect that sets the ultra HNIs apart from the average individual is their unquenchable (corporate) thirst for growing their business into their personal wealth too.
Earlier, inherited and landed assets dominated the wealth landscape; however, today, it is enterprise and business ownership that has emerged as the dominant source of riches. In India, though, enterprise culture is a more recent phenomenon.
This survey on investment patterns has revealed a very interesting dichotomy: as a class, the ultra HNIs uniformly exercise far greater degree of caution when it comes to their investments compared with the kind of risks they are willing to undertake in their businesses. The difference among them is only in terms of degree, when it comes to risk aversion.
All the three ultra HNI profiles – the Inheritors, the Self-made, and the Professionals – save nearly a fifth of their total income, and invest close to another one-fifth to multiply their personal wealth.
Although, the choice of asset classes varies, in accordance with the requirement.
Compared with the others, the Self-made tend to take calculated risks with their investments. For the Professionals, our survey reveals, social security and regular income are key investing goals. The Inheritors have a distinct preference for real estate with 40 per cent of their investments in this asset class.
Previously, most ultra HNIs invested in a few asset classes, using local brokers, chartered accountants, or tax consultants. The wealth management market in India was served by those that cross-sold mutual funds and broker/banking products to the rich. However, today there is an increased willingness to seek advice from professional investment managers.
This chapter, not only gives an insight to the various asset classes the ultra HNI prefer while investing but also, the difference in trends of the investment patterns of the three ultra HNI profiles.
To know more, download the chapter.
