Wealth Management Industry Set to Double AUM to $2.3 Trillion by FY29: Report

The wealth management sector in India is set for a notable expansion, with assets under management (AUM) projected to more than double from $1.1 trillion in FY24 to $2.3 trillion by FY29, according to a report by Deloitte India. The industry’s growth is being driven by rising income levels, evolving macroeconomic factors, and an increasing appetite for financial services.

Unmet demand signals growth potential

Despite the financial wealth of affluent households reaching $1.1 trillion in FY24, a substantial $0.4 trillion is still managed informally or by individuals themselves, the report highlighted. With the wealth of these households expected to surge to $2.3 trillion in five years, the sector offers immense opportunities for established players and new entrants to cater to this untapped market.

Shifting trends among affluent households

The number of affluent households, defined as those with annual incomes exceeding $25,000 and forming the top 4-5% of the population, is projected to rise. These households are increasingly favouring financial assets such as mutual funds, equities, and portfolio management services over traditional physical assets like gold and real estate.

For instance, mutual fund AUM has grown at a robust annual rate of 16.2% between FY17 and FY24, reaching $651 billion.

Tech-driven transformation ahead

Wealth management firms are adopting advanced technologies such as data modernisation, cloud computing, and enhanced cybersecurity to deliver improved customer experiences. Vijay Mani, Partner - Banking and Capital Market at Deloitte India, stressed the need for companies to adapt to this dynamic landscape.

"Rising affluence and changing preferences amongst key customer segments will fuel unprecedented growth in India’s wealth management industry. However, the competitive nature of the market demands a focused understanding of customer needs, tailored products, and innovative hybrid operating models," Mani stated.