According to a Deloitte India report, the wealth management industry in India is set to experience an explosive growth in the coming years, with the Assets Under Management (AUM) projected to more than double 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 massive increase in AUM will be driven by shifting macroeconomic trends, rising income levels, and a significant rise in the number of affluent households. The report highlights a notable unmet demand for wealth management services, with a significant portion of financial wealth still being self-managed or informally managed.

In FY24, affluent households in India collectively hold Rs. 95,23,800 crore (US$ 1.1 trillion) in financial wealth, of which about Rs. 34,63,200 crore (US$ 0.4 trillion) is managed informally or by the households themselves. This presents a vast opportunity for both established wealth management players and new entrants into the sector, particularly as the Indian economy grows, and the number of affluent households continues to rise. With wealth increasing rapidly, the demand for professional wealth management services is expected to surge in the coming years.

A significant shift in the preferences of affluent investors from traditional physical assets like real estate and gold to financial assets such as mutual funds, equities, and portfolio management services is already evident. For example, mutual fund AUM has grown at an impressive annualized rate of 16.2% from FY17 to FY24, reaching Rs. 56,36,358 crore (US$ 651 billion). This trend is set to continue, further fueling the demand for wealth management services and financial advisory.

In response to the evolving needs of investors, wealth management firms in India are increasingly integrating modern technologies such as cloud infrastructure, data modernization, and cybersecurity into their service offerings. These technologies help improve customer service, provide more personalized investment solutions, and ensure the safety of investor data, enhancing the overall experience. According to Vijay Mani, partner at Deloitte India, the growth of this industry will depend on a deep understanding of customer needs, better product tailoring for different market segments, and a hybrid operating model that combines the expertise of Relationship Managers with cutting-edge technology.

The industry will also need to maintain a strong focus on regulatory compliance to stay competitive and profitable. As the wealth management sector expands, maintaining compliance with evolving regulations will be crucial to sustaining long-term growth and attracting more investors.

This growth trajectory is expected to significantly contribute to India's financial ecosystem, offering investment opportunities and a greater global presence in the wealth management space. As India continues to emerge as a global economic power, the wealth management industry is poised to play a critical role in shaping the country's financial future.

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