The investment strategies of the ultra-rich have always intrigued retail investors, especially amidst the astronomical rise in the number of high-net worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) in recent years.
With the wealth management sector now managing assets estimated at $1–1.2 trillion, the industry is undergoing rapid transformation, driven by a growing base of high-net-worth individuals, asset appreciation, and shifting client expectations.
In an interaction with Arshad Khan of The New Indian Express, Srikanth Subramanian, Co-Founder & CEO of Ionic Wealth (formerly Angel One Wealth Ltd.), shares his insights on the evolution of India’s wealth management industry, opportunities in global markets, and where the super-rich are channelling their investments.
Edited excerpts:
How has the wealth management business evolved over the years? Where do you see its future in the next 5-10 years?
The wealth management industry in India has witnessed tremendous evolution, reaching market size with current assets under management estimated between $1-1.2 trillion. We are confident in the “Triple Multiplier Effect” driving this growth – an expanding segment of high-net-worth individuals at 16%, continued asset appreciation at 10%, and 3-5% incremental growth in earnings and savings. Together, these factors have the potential to increase the industry forward with a CAGR of 25-30%.
How are HNIs and UHNIs clients different from average retail investors?
HNIs and UHNIs, especially the new generation from family businesses, approach wealth management with a more strategic and expansive vision than a retail investor. While retail investors focus on short-term financial goals, HNIs and UHNIs focus on legacy, wealth preservation, and diversified growth. This generation, shaped by international exposure through education or work experience, brings a global mind-set and is actively exploring opportunities beyond traditional investment products.
The share market is trading around record-high levels. Would you enter the market at the current prices or wait for the valuations to become a little more attractive?
India had seen an unprecedented run in equities in the last 3 years. This had pushed the valuations on the expensive side. Now, the earnings are slowing as is seen in the latest earnings season. Of the data releases, BSE 500 PAT has contracted by 4% YoY. Additionally, external events such as the US elections and geopolitical tensions are creating a global risk-off environment which is reflecting on India equities. There are signs of slowdown in the domestic economy, as is seen by the high frequency data. However, all of this is likely to be transient and the current domestic investing landscape can rather be an opportunity to invest for the long term.
Besides equity, what are the other avenues you prefer or advise your clients to invest into?
Beyond equities, we advise clients to consider a well-diversified approach across several asset classes- debt, precious metals, commodities, FX, unlisted equities, global equities, credit and more. On the Indian debt, we believe strong demand for Indian bonds, coupled with improvements in the twin deficit, points to a favourable long-term outlook for bonds. In the global equities space, we are proposing a stable US and a tactical China allocation. Given the mix of valuations available worldwide, there’s a huge case of Indian investors to avoid home bias and take advantage of the global opportunities. Precious metals are attractive in today’s market, especially as they typically perform well during periods of equity volatility, offering a perfect hedge against equity.