The Indian high networth individual (HNI) population grew by 10.5 per cent with a total of 308 individuals now falling into the category of ultra-rich. Globally, this grew by 7.8 per cent to 22.5 million individuals, with their wealth collectively growing by 8 per cent at $86 trillion, despite the pandemic, according to a ‘World Wealth Report’ by Capgemini.
“The demographic of HNIs has continued to evolve, with increasingly more women, LGBTQ+ individuals, millennials, and Gen Zs now seeking wealth management services. These emerging client segments each have their own values, preferences, and requirements, which many wealth management firms are currently unequipped to provide for,” the report said.
Indian HNIs
Though the number of HNIs in India is very low when compared to other countries, the Asia-Pacific region as a whole had a collective HNI wealth of $25.3 trillion, which grew by 5.4 per cent in 2021.
India had 261 HNIs in 2020, which grew to 308 in 2021. Collectively, the total HNI wealth of these Indians grew by 11.6 per cent.
The report noted that several factors were responsible for this growth in wealth. Those factors are:
1] Higher liquidity support from India’s central bank.
2] Supporting domestic government policies.
3] Increased vaccination drives, and
4] Wealth expansion by way of the market delivering excellent returns.
Also to be noted is the fact that the Nifty 50 gave a return of 24 per cent in 2021, and the Sensex gave a return of 22 per cent in 2021.
The report also laid out an interesting fact about ultra-HNIs. They are those individuals whose wealth is more than $30 million. Worldwide, there are about 220,221 individuals with wealth above $30 million. It was noted that in the entire Asia-Pacific region, India and Taiwan were the top contributors in the ultra-HNI category.
The worldwide ultra HNI population remained constant at 9.6 per cent, but their collective wealth decreased by 1 per cent, the report said.
The report also mentioned some interesting findings.
Women: Women across the entire wealth bracket were all set to inherit 70 per cent of the global wealth over the next two generations, but they are also less confident in their primary wealth managers in their ability to generate or grow wealth in the next 12 months. The report noted that this was because women lacked investment tools and financial education. Thus, they can immensely benefit from investment related education, the report noted.
Digital Assets: An interesting insight from the report was that globally, 71 per cent of HNIs had invested in digital assets like cryptos and non-fungible tokens (NFT). Further, about 91 per cent of these HNIs, who had invested in digital assets, were under 40 years old. When asked about these investments, they said cryptocurrencies were their most favourite digital asset, followed closely by exchange-traded funds (ETFs) and metaverse-related assets.
Covid-19 Impact: The report noted that the mindset of the HNIs have been overall positive despite the turmoil created by the Covid-19 pandemic. Equities remained the most preferred investment avenue for them, and the overall allocation remained the same as before the pandemic and after the pandemic. But now that the markets have started to fall in 2022, their reactions are yet to be seen, the report added.
Equity Allocation: Japan recorded the highest equity allocation, with 36 per cent of HNI wealth being invested in equity. This was followed by the US, where 32 per cent of HNI wealth was being invested in equities.
