Owing to the global slowdown, high net worth individuals (HNIs) in India are increasingly seeking wealth managers to manage and restructure their investment portfolios. Due to subsequent losses in high income-yielding assets like real estate, stocks and mutual funds, they now make investments in risk-free assets like bonds and bank deposits, which have reduced the size of their portfolios. "More HNIs are turning towards wealth managers for better advice on allocating their wealth towards fixed instruments such as fixed maturity plans (FMPs), fixed deposits and government securities, as there is no capital risk there," said Centrum Capital CEO Rahul Rege.
While the number of HNIs turning to wealth management solutions has gone up 15%, many of them are NRIs who brought in $40 billion in 2007-08, shows an RBI data. The number of NRI investors is also up by 20%. According to iMetanoia Financial Services CEO Raj Majumder the number of NRIs making use of their wealth management services has increased from 100 to 120." The ongoing financial turmoil in international markets has made HNIs cautious about investments in equity and real estate, which was a key area of investment earlier. Nowadays FMPs, government securities like bonds and treasury bills, and bank deposits are favoured destinations for fund allocation by HNIs.
"They now want to safeguard them against risk and thus prefer investing in assets involving liquidity," explains Bharat Parekh Financial & Insurance Services CEO Bharat Parekh. Client Associates partner Rahul Nair says: "Many businessmen, doctors and young entrepreneurs are approaching us for wealth management services. It has become all the more crucial at this point of time as people need to reshuffle their existing portfolios in order to safeguard themselves against unforeseen contingencies."