Latest on Wealth Management in India

India on its way to become trillion-dollar wealth management market by 2012

How? Look at the predictions from various sectors:

• According to a recent report, the wealth management market in India will be having a target size of 42 million households by 2012, as against only about 13 million in 2007.

• New Delhi: Indians will be having one trillion dollars worth investable wealth by year 2012, indicating the country's robust economic growth that drives a four-fold surge from just about 250 billion dollars in 2007.

• In a report by international consultancy firm Celent, the number of potential clients for wealth managers and size of manageable wealth are both expected to grow four-times through 2012. India is all set to become a huge hunting ground for wealth managers across the globe.

• The report titled 'Overview of the Wealth Management Market in India' noted that the wealth management market will be having a target size of 42 million households by 2012, as against only about 13 million in 2007.

• The wealth management sector in India is poised to witness tremendous growth. The country's economic growth is making larger sections of its population prospective customers of wealth management providers.

• The growth will be seen across all income-levels. However, the lower-income segment is the one that would record maximum growth in terms of volume, while high-net worth households would be contributing the most in terms of wealth size.

• Celent has defined the lowest end of the target market for wealth managers as a household with a minimum income of $5,000 (Rs2 lakh), while the ones with at least $30 million (Rs120 crore) of investable income has been added in the category of ultra-high net worth.

• The wealth management revenues are expected to contribute nearly 32-37% of the total revenue of full-service financial institutions by 2012.

• The mass-market (having Rs. 2-10 lakh of disposable income) would be the key driver, accounting for nearly 40% of the overall growth in number of households.

• Except the niche players, majority of wealth managers would target the mass market owing to its youth-dominance and this market would be seeing more service providers entering the fray with an 'own them young' policy.

• The ultra-high net worth households [having wealth in excess of $30 million] would have a total population of around 10,500 households by 2012, while the super high net worth households ($10-30 million) would grow to 42,000.

• The count of high net worth households ($1-10 million) will grow to 3, 20,000, while there would be 3, 50,000 households in the super-affluent category (Rs. 50-400 lakh).

• Also, 10 lakh new households would be joining mass-affluent category (Rs10-50 lakh), taking their total population to 18 lakh by 2012. However, a vast majority of 39 million households, out of the total 42 million target market population in 2012, would belong to the mass market (Rs 2-10 lakh).

• Private Banks, full service brokerages & independent financial advisors would serve the high net worth segment, while ultra high net worth households would be served by private banks & family offices.