Why are Indian wealth management firms expanding despite low margins?

Firms are expanding to capture market share amid intense competition and a growing affluent population, aiming to offset margin pressures through scale.

What challenges are India's wealth managers facing?

They face declining fees, rising operating costs, fierce competition, and regulatory changes impacting their profitability.

How is 360 ONE Wealth adapting to market conditions?

360 ONE is increasing employee costs, hiring more relationship managers, and developing proprietary products to navigate industry challenges.

Home / Business and Economy / India's Wealth Managers Fight for Every Rupee

India's Wealth Managers Fight for Every Rupee

10 Dec

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Summary

Indian wealth managers face shrinking margins due to intense competition.
Affluent households in India have surged by 90% since 2021.
Firms aggressively hire relationship managers and develop in-house products.

India's Wealth Managers Fight for Every Rupee

Indian wealth management firms are intensifying their expansion efforts amidst shrinking net income margins. The sector faces pressure from escalating operating costs, declining fees, fierce competition, and evolving regulations, all of which are impacting profitability. This expansion is fueled by a significant rise in affluent individuals, with India now boasting 870,000 dollar millionaire households, a 90% increase from 2021.

In response to this competitive landscape, wealth managers are strategically increasing their workforce, particularly relationship managers, and focusing on creating in-house financial products. These moves are designed to attract and retain high-net-worth clients while simultaneously expanding their reach into tier-II and tier-III cities. Despite these efforts, profit margins continue to face downward pressure as investors seek more cost-effective solutions.