Money in motion

Navigating India’s evolving

financial landscape
with wealthtech

August 2024

Money in motion 1
 04 06 08 14
Global wealth India’s
Executive management: financialization
Foreword Summary setting the context thrust

a. Global wealth a. The

management financialization
industry: an revolution
overview b. Revolutionizing
b. Indian wealth markets:
management welcoming the
industry: the new ”affluent”
journey has customer
only just begun
c. Wealthtech in
India: charting
a new frontier

2
Contents
Money in motion
22 28 32 36
Competitive
Wealth landscape: Evolving
management in the great regulatory Shaping
the digital age convergence landscape tomorrow

a. Next-gen a. Understanding The future

wealth: the changing of wealth
redefining regulatory management
the role of landscape in in India
relationship India
managers b. The future
b. Standing out impact of
in the age of regulatory
personalization: developments
hyper-
personalized
investment
strategies
c. Robo-advisory:
an evolution
of wealth
management
proposition
for the mass
affluent
segment

Money in motion 3
 The wealth management industry is undergoing a foundational shift. Fundamental
changes in client relationships, assets in motion, heightened competition, rise
of the big tech, regulatory changes and increasing pressure to improve financial
performance while strengthening client trust and value are transforming the
industry. These are not optional challenges — they are non-negotiable factors that
will determine success for wealth management firms over the next five years.
The defining question for the industry has become: ”How to rethink and reshape
business and operating model—to drive growth, profitability and sustainable
competitive advantage by effectively addressing these challenges.”
Global wealth growth, despite multiple crises spanning economic, political and
social events, has proven to be stubbornly robust, demonstrating its ability to adapt
and thrive even in the face of systemic challenges. Global wealth currently stands
at approximately $450 trillion, with over $150 trillion in new wealth projected
to be created in the next six years. While market trends are influencing wealth
management business operating models, the core essence of the industry’s value
proposition remains unchanged: helping clients create, protect and responsibly
grow their wealth.
While North America, Asia-Pacific and Western Europe continue to account for
around 80% of global net wealth, Asia-Pacific is facing growth headwinds, primarily
due to concerns over China’s growth prospects. Amid this uncertainty, India has
emerged as a bright spot, with now home to more than 260 billionaires and 1,300
millionaires generating $588 billion in new financial wealth in 2023 — its largest
increase in history.
India is among the world’s fastest-growing economies and financialization is the
key driver propelling this growth. Household financial assets are expected to reach
US$6 trillion by 2028. Our chapter on India’s financialization thrust outlines that
the growth in financial wealth, financial literacy, rising affluence and need for yield
has resulted in a shift of preferences from traditional fixed deposits to managed
investment solutions. The size of the managed investments industry is set to grow
to US$3.9 trillion by FY2027 (~74% of GDP) from US$1.7 trillion in FY2022 (~57%
of GDP). The investment asset class will grow faster, driven by “value migration”
and a “long runway,” making India’s wealth industry a structural and scalable
opportunity.
India’s customer segments have undergone a drastic change. While the traditional
wealth management customer base of UHNI and HNI households commands an
asset pool exceeding US$1 trillion, a new wave of affluent investors, including
millennials and Gen Zs, has emerged as a force to be reckoned with. The chapter
titled ‘Revolutionizing markets: welcoming the new “affluent” customer’ covers
in-depth the enormous potential of this segment and outlines the key challenges
wealth management firms will face in serving these diverse customers with their
complex needs and varying channel preferences.
• Changing client profiles and behaviors are driving the shift in business models,
products and digital priorities
Foreword

• Vast wealth transfer to the next generation of millennials and GenZ is expected
by 2045
• Potential customer includes mass affluents, young investors and women
• Client preferences shifting towards greater personalization and convenience

4 Money in motion
Wealth is transitioning to the next generation, who are exhibiting markedly different behaviors from their
predecessors. With an attrition rate four times higher, these new customers expect on-demand products and
services from their wealth managers. If these expectations are not met, they do not shy away from quickly
switching to other providers.
The emergence of ‘Big Tech’ is driving the biggest disruption. Digital-first wealthtech firms have bridged the
gap with traditional players by broadening their product offerings, pushing incumbents to defend their market
positions by enhancing their capabilities. By leveraging technology, wealthtechs now offer hyper-personalized
advice and real-time portfolio management, addressing the increasingly complex needs of diverse clients at
scale. In response, incumbents have accelerated their digital transformation to compete more effectively with
these tech-driven challengers. While it is still early to determine the long-term success of robo-advisory services,
features like automated investments and algorithm-based adjustments and rebalancing have shown promise.
However, it remains to be seen if these innovations can fully replace the need for human touch.
Our experience with early GenAI use cases across the value chain suggests it will significantly reshape many
jobs, enabling relationship managers and their teams to focus more on core advisory tasks while routine
processes are managed by technology. It is imperative that all digital transformation plans now embed GenAI—
along with a strategy to harness its benefits and address its potential challenges. This will unlock efficiencies and
a customer engagement model that the world has only just begun to experience.
Amidst the transformative changes reshaping the wealth management industry in India, the future holds
immense promise. This report aims to shed light on critical trends and strategic imperatives that will guide
wealth managers toward sustained outperformance. By focusing on these pivotal areas, we strive to support
industry professionals in navigating the evolving landscape and achieving long-term success. We hope you find
our report insightful and empowering as you navigate the complexities and opportunities within India’s wealth
management sector.

Saurabh Joshi Nilesh Naker

Partner, Partner,
Financial Services Consulting Technology Consulting
EY India EY India

Money in motion 5
 The wealth management sector in India is at the helm of transformation,
underscored by the rapid financialization of the economy and the profound impact
of digitalization. The sector is currently experiencing trends, such as hyper-
personalization of financial advice, a shifting investor base towards the affluent
segment and residents of tier 2 and tier 3 cities, and technological advancements
giving rise to wealthtech firms.
The wealth management sector in India is well poised to register a healthy CAGR
of 12% to 15%1 over the next five years. According to the Knight Frank Wealth
Report 2022, the Indian UHNI population and HNI population are expected to clock
a CAGR of 7% and 12%, respectively, over 2021-262. The mass affluent segment
is expected to grow at ~15%3 over the medium term, with technology and platform
services being key differentiators in this fiercely competitive landscape.
India’s financial sector is experiencing a marked shift as savings increasingly move
from physical assets to financial instruments. This financialization is driven by a
combination of enhanced financial literacy, favorable demographics and supportive
government policies, creating a fertile environment for wealth management
services to flourish. Digitalization has been a catalyst for change, enabling firms
to reach a broader audience and offer more sophisticated services. The adoption
of digital platforms, mobile applications and online tools has made wealth
management more accessible and convenient for a diverse range of investors.
The wealth management industry is witnessing a trend towards hyper-
personalization, where services are tailored to an individual’s financial goals, risk
appetites and life stages. This bespoke approach is facilitated by advancements
in data analytics and artificial intelligence. The investor base in India is also
transforming as wealth management services penetrate the affluent segment
and gain traction in smaller cities. This expansion is democratizing investment
opportunities and prompting wealth managers to develop products that cater to a
wider spectrum of financial needs and aspirations. Technology has been a game-
changer, with the emergence of wealthtech firms leveraging cutting-edge tools to
enhance service delivery, leading to more efficient operations, reduced costs and
improved customer experiences.
The wealthtech sector in India is highly competitive, with a dynamic mix of new
entrants and established players, promising continued expansion as it meets
Executive Summary

the growing demand for digital financial advice and investment services. These
entities are leveraging cutting-edge technologies like AI, machine learning and
blockchain to offer innovative and user-friendly investment services, particularly to
a younger, tech-savvy demographic. With competition heating up, these platforms
are enhancing user experiences, streamlining portfolio management and reducing
costs. Traditional banks are not far behind, as they digitalize their offerings and
collaborate with or acquire fintech firms to stay relevant.
The regulatory framework for wealthtechs in India is evolving to address the
unique challenges posed by technology-driven services. Regulators are focusing on
ensuring consumer protection, data privacy and cybersecurity while promoting a
conducive environment for innovation.
The outlook for wealth management and wealthtech in India is optimistic, with
expectations of continued growth and innovation. With a large and youthful
population showing a rising propensity to invest, coupled with regulatory reforms
aimed at enhancing transparency and investor protection, the sector is poised for
significant growth. Technological advancements are enabling greater access to
wealth management services across diverse demographics
and the introduction of innovative financial products is catering to a broader
range of investor needs, offering a wealth of opportunities for both domestic and
international investors as well as firms.
“Outlook on Wealth Management sector: Angel One, 360 One could give 10-20% return in 1 year”-
1,2,3

Economic Times, 2 October 2023

6 Money in motion
Money in motion 7
 1
Global wealth
management:
setting the context
8 Money in motion
1.1 Global wealth management market: an overview
Wealth growth has shown extraordinary resilience to extreme events. Although not immune
to market volatility, global wealth portfolios have rebounded from recent shocks, including
the Great Recession and the COVID-19 pandemic. Strong equity markets have been pivotal
in driving these gains, with real assets playing a significant role as well. Physical assets, such
as real estate and gold, remain favored by much of the world’s wealthy, with investor interest
continuing to intensify. The overall wealth pool currently stands at approximately US$450
trillion and is expected to grow by an additional US$180 trillion over the next seven years.

Growing wealth- A global trend Figure 1

From To
2023 2030

454 630
US$T Wealth US$T

59 100
(M) (M)
Millionaires

Source: UBS Global Wealth report 2023 and EY internal research

The regional outlook for wealth remains positive, with Asia-Pacific continuing to lead in
wealth growth. Projected to grow at a rate of approximately 9% over the next five years, the
region is expected to hold nearly 25% of the world’s wealth by 2030.
A notable shift is witnessed in cross-border asset flows, with some domiciles experiencing
faster growth than others. Switzerland, the traditional powerhouse of cross-border
wealth management, now faces competition from booking centers such as Hong Kong
and Singapore, driven largely by the repatriation of assets back to Asia-Pacific. In recent
years, the UAE has also gained recognition as a booking center, offering a highly attractive
environment for both banks and investors. This repositioning has been partly fueled by the
accelerated creation of wealth outside Europe, as well as a significant outflow of Russian
assets from Europe to the Middle East.

Money in motion 9
 Key macro themes reshaping the industry
Key macro trends Figure 2

1 Financial pressure 2 Structural changes

in the industry 3
Changing demographics
and client needs 4 Redefining the
future of advice

• Profitability • WM provider • Changing client • Advisor-led

pressures are landscape is profiles and engagement
reinforced by rigid fragmenting behaviours are driving channels will soon
cost structures, as incumbents the shift in business account for less
increasing face increasing models, products, and than 50% of all
operational competition from digital priorities client interactions
complexity, growing online brokers,
• Vast wealth transfer • The future of
compliance WealthTech
to the next generation advice is to
burden, and fierce firms, and asset
of millennials & GenZ seamlessly blend
competition for managers
is expected by 2045 human contact
talent
• Structural with automated
• Potential customer
changes in wealth interactions,
incl. mass affluents,
management providing smooth,
young investors &
are forcing high-value,
women
incumbents to omnichannel advice
defend their market • Client preferences in real time
positions, enhance shifting
capabilities, and towards greater
differentiate more personalization &
strongly convenience

Source: 2024 EY Global Wealth Management Industry Report: Rethinking the how, EY Internal Research

1 Financial pressure: Since 2022, rising inflation, interest rates, and market volatility have weakened the economic
outlook. Wealth managers are grappling with slow asset growth and tighter margins due to:
• Increased competition: New entrants and a broader range of products are driving portfolio management
commoditization.
• Price sensitivity: Clients are more fee-conscious and regulatory pressures are intensifying accountability, further
squeezing margins.
• Asset allocation shifts: Open architecture and passive investing are lowering fees, while discretionary mandates
and structured products provide limited relief.
• M&A consolidation: Post-pandemic M&A has concentrated market share, fuelling competition across regions.
Profitability pressures are being reinforced by rigid cost structures, increasing operational complexity, growing
compliance burdens and fiercer competition for talent.

2 Industry shifts: Wealth management’s stable margins and low capital costs are drawing new competitors,
fragmenting the market:
• Wealthtech firms and discount brokers: gaining influence with younger, tech-driven wealth holders
• Asset managers: expanding into wealth management with unique value offerings
• Global institutions: banks, insurers and custody services are aggressively targeting affluent and HNW clients
Increasing competition from maturing players will accelerate structural change in wealth management, forcing
incumbents to defend their market positions, enhance their capabilities, differentiate themselves more strongly and
rethink the synergies offered by parent groups’ integrated business models.

10 Money in motion
3 Changing demographics and client needs: Each generation feels that it is living through unprecedented times. But
today, wealth managers and their clients are indeed navigating exceptional change. Key themes include:
• Evolving client preferences: clients demand hyper-personalization, convenience, sustainability and lower risk
across all segments
• Regulation: stricter rules on consumer protection, privacy, data and sustainability reshape the industry
• Tech disruption: Generative AI, blockchain, quantum computing and cyber threats like ransomware are
transforming operations
• Investment innovation: private markets, digital currencies and tokenized assets expand client choices
• Employment dynamics: shifts in purpose, work-life balance, career paths and remote work impact both clients
and staff
These factors indicate that wealth advice, investment management and client experiences will evolve more rapidly
in the next five years than they have in the past two decades presenting both challenges and opportunities for
incumbent wealth managers.

4 Redefining the future of advice: High-quality financial planning and advice are central to a wealth manager’s value
proposition. The challenge lies in scaling these services while delivering personalized advice to HNW clients at a
sustainable cost. Technology is crucial in enhancing both relevance and profitability, but success depends on aligning
multiple elements to significantly boost the value of advice.

1.2 Indian wealth management industry: the journey has only just begun
India is projected to become a US$5 trillion economy by 2027-28, positioning itself as the third-largest global economy.
The country’s vibrant entrepreneurial ecosystem is reflected in the rapid growth of ultra-high-net-worth (UHNW) individuals,
with nearly three new members joining this exclusive group daily as startups gain market traction. This trend underscores
the substantial growth and evolution occurring within India’s wealth management sector, propelled by demographic shifts,
intergenerational wealth transfer and the rising influence of millennial high-net-worth individuals (HNWIs).
India’s savings rate remains well above the global average, currently around 29.1% of disposable income. Traditionally, a
significant portion of these savings was allocated to physical assets like gold and real estate, which constitute approximately
65% of household assets. However, over the past 5-7 years, rising disposable incomes and the advancement of financial markets
have driven a noticeable shift toward financial assets, including bank deposits, equities and mutual funds. The share of financial
assets in total investments increased from 40% in 2018 to 57% in 2022.
Within the financial assets, managed investments arena is on the cusp of hyper growth. The managed investment space is
anticipated to experience substantial growth, with the market expected to double in size over the next five years. The number
of unique mutual fund investors now exceeds 40 million, with the total number of mutual fund folios surpassing 170 million.
Additionally, the number of demat accounts in India has also exceeded 170 million. And we have only just begun.
The addressable asset pool for UHNI and HNI households—the primary target segment in traditional wealth management in
India—is valued at over US$1 trillion, with forecasts indicating it will nearly double within five years, exceeding US$2 trillion.
UHNI and HNI segments are seeking differentiated products that give them an option to generate better positive alpha on their
investments which is driving the shift to more sophisticated managed investment solutions like AIFs. US$130 billion have been
raised in commitment across all three categories of AIFs and this is expected to more than double over the next five years.

Money in motion 11
 Relative Industry Size Figure 3

AUM/Premium
Assets Under Management to GDP
Asset Class
(AUM) CAGR Last 10Y
India US/Global
Mutual Funds 21% 16% 116%

AIF 68% 1% 13%

Insurance 14% 3% 11%

Source: Nuvama Wealth

The convergence of demographic changes, economic trends, technological advancements and regulatory initiatives is
driving the expansion of the affluent segment. Wealth managers of all sizes are racing to serve mass affluents in a bid to stay
competitive and profitable over the longer term. As wealth is shifting hands to the next generation, which presents financial
advisors with an opportunity to tap affluent younger generation. To address the evolving needs of the affluent segment,
wealth managers are focusing on hyper-personalized service models, leveraging advanced technology, and driving operational
transformation. This includes enhancing investor education and broadening their service offerings.
Wealth management in India is a multi-decadal opportunity driven by rising incomes, expanding financial markets, and the
shift from physical to financial assets. Growing wealth creation, intergenerational transfers, and the demand for sophisticated
investment solutions ensure long-term growth in this evolving sector.

Key trends shaping the Indian wealth management landscape Figure 4

Key trends Description

The growing dominance of financial markets and instruments in shaping

Shift in
the economy is overshadowing traditional sectors, steering wealth towards
financialization investments in securities over physical assets.

India is experiencing the rise of middle-class investors, millennials and GenZs

Emerging client with the rise in their wealth due to higher returns from capital markets,
segments inheritance of generational wealth, entrepreneurial success.

The wealthy in smaller cities are also adopting professional management

Focus on Tier 2,
of wealth, increasing participation of smaller cities in the wealth
Tier 3 cities
management sector.

Investors in India are demanding more personalized wealth advisory services,

Holistic investment strategies and financial planning, real-time investment analytics
personalization along with hybrid model of advisory services.

The new investor segment of millennials and GenZs demand tech savvy wealth
Demand for digital advisory services, with all their investment requirements at their fingertips in
solutions real-time, facilitated by the guidance of a financial expert.

Source: EY Insights analysis

“Indian wealth-tech segment to be $60 billion opportunity by FY25: RedSeer report”- Financial Express, 16 December 2020
4

5
“Indian Wealthtech Compendium 2022”- Equalifi

12 Money in motion
1.3 Wealthtech in India: charting a new frontier
The wealthtech market in India is a burgeoning segment within the country’s broader fintech ecosystem, reflecting a unique
blend of technological innovation and financial services being customized to the diverse needs of the Indian population.
According to a report by RedSeer Consulting, the Indian wealthtech market is poised to grow to over US$63 billion by FY25
from US$20 billion in FY204. In 2022, India had ~4 million wealthtech investors expected to grow to ~12 million by 20255

Drivers of growth of wealthtechs in India Figure 5

Exponential rise Under-

Increasing penetration
of internet and
disposable of financial
smartphone
income assets
penetration
Young Growing
Rapid growth demographic awareness
of middle-class keen on digital of financial
segment solutions assets

Source: EY insights analysis

Popular wealthtech solutions in India include robo-advisory for automated financial guidance, digital brokerage platforms
providing direct market access and portfolio management tools that centralize investment tracking. Additionally, B2B software
services offer tailored technology solutions to enhance operations of wealth management firms, making advanced financial
strategies accessible, and improving the sector’s efficiency and inclusivity. India has risen as a formidable fintech powerhouse
globally, with the wealthtech sector playing a pivotal role in transforming and digitalizing the nation.

The Indian fintech ecosystem Figure 6

Payments Lendingtech Wealthtech Insurtech Other

Gateways B2C dig.lenders Trading Underwriters Core banking

POS financing

BNPL

Payment wallets/UPI Investing Brokers Neo banks

Marketplace

B2C

Cross border SaaS

P2P

Alternate assests Claims mgmt.

PoS B2B focused Others

Source: “The Fintech revolution in India: bridging the digital divide”- Analysys Mason

Money in motion 13
 2
India’s
financialization
thrust
14 Money in motion
2.1 The financialization revolution
2.1.1 Leading the world: India’s exceptional savings rate
Cultural factors, economic conditions, and the lack of a comprehensive social security
system, which encourages people to save for their future needs, influence the high savings
rate in India.

Gross domestic savings as a percentage of the country’s

Gross Domestic Product (GDP) in 2022 Figure 7

28.1% 29.1% 27.0% 25.5%

22.8%
17.1% 17.1%

Global India US UK Germany Japan Canada

Source: The World Bank

Indian individuals and households set aside a significant portion of their income as savings
rather than spending it on consumption. The fact that India’s savings rate remains above the
global average can be a positive indicator of financial institutions and investment opportunities
within the country in comparison to other nations.

2.1.2 From gold to growth: India embracing new financial assets

Traditionally, Indians have preferred to invest in physical assets, such as gold and real estate. A
significant portion of the Indian economy is still informal, where people do not have access to
formal banking and credit systems. This leads to a higher propensity to save in physical assets
like gold and real estate. However, there has been a noticeable shift in recent years, with more
people looking towards financial assets like stocks, bonds, mutual funds and bank deposits as
preferred investment options.

In 2020-2021, for the first time ever, the proportion of savings

in financial assets relative to the GDP (11.63%) surpassed that in
physical assets (10.54%)*

*Source: Indian Public Policy Review, 11 August 2023

The trend towards financialization of savings is evident in the surge of new trading and demat
accounts, which saw an increase of 381% and 418%,6 respectively, compared to the three
years before the pandemic. This shift results from enhanced knowledge of financial assets,
attractive returns from the financial markets, the ease of financial investment management,
and government efforts to advance financial inclusion and education. Consequently, the
typical investment portfolio of an Indian investor is evolving, showing a greater allocation
towards financial assets.

6
“Covid-19 and the Goalkeeper of the Indian Economy”- Indian Public Policy Review, 11 August 2023

Money in motion 15
 Share of financial savings to savings in physical assets Figure 8

47.5%
55.1%
58.9% 60.4% 61.2% 59.0%

52.5%
44.9%
41.1% 39.6% 38.8% 41.0%

FY16 FY17 FY18 FY19 FY20 FY21

Financial savings Savings in physical assets

Source: RBI, CRISIL MI&A Research via “The big shift in financialisation”- CRISIL, December 2022
Note: Data is for financial year ended March

2.1.3 Managed assets: the new favorite in financial assets

Within the realm of financial assets, Indian investors are increasingly opting for managed investments, such as mutual funds
and portfolio management services. The investment landscape has seen a significant increase in new Mutual Fund (MF) folios
opened, average monthly inflow to MF Systematic Investment Plan (SIP) and the inflow to equity schemes of MFs by 50%, 29%
and 14%, respectively,7 from pre-COVID years of 2017 to 2019 and post-COVID years of 2020 to 2022. This shift is due to the
professional management of these investment vehicles, which offers the potential for higher returns and diversification of risk.
Investors increasingly recognize the benefits of having experts manage their investments, especially in a complex and volatile
market environment. The managed investment industry size rose to 57% of GDP in 20228. It reported an Assets Under
Management (AUM) of INR135 lakh crore as of March 20229. The MF industry’s AUM doubled from INR22.26 lakh crore in
2019-2020 to INR54.1 lakh crore in 2023-202410.
Amid this increasing interest towards managed investments, the growth of traditional fixed deposits (FDs) is getting
overshadowed by managed investments. This is happening because of increased digitalization, rising investor sophistication in
terms of retirement planning, higher awareness and use of insurance, investment objectives aimed at beating inflation and a
growing middle-income population, as per the Credit Rating Information Services of India Limited (CRISIL). The rating agency
estimates assets in the managed investment segment to double to INR315 lakh crore by FY27, and the trend is expected to
continue well past FY27.

7
“Covid-19 and the Goalkeeper of the Indian Economy”- Indian Public Policy Review, 11 August 2023
8,9
“The big shift in financialisation”- CRISIL, December 2022
10
“The Mutual Fund industry in India”- Bajaj Finserv
11,12,13
Indian mutual fund industry likely to hit Rs 100 lakh crore by 2030: Axis Capital”- Economic Times, 23 February 2024

16 Money in motion
Growth in assets of managed investments vs fixed deposits (in INR lakh crore) Figure 9

Managed Invested Assets Traditional FDs

CAGR +10%
170
CAGR +16%

135

108

63

2017 2022 2017 2022

Source: AMFI, NPS Trust, IRDAI, SEBI, Life Insurance Council, RBI, CRISIL MI&A Research

2.1.4 Vast runway for growth despite market under penetration

Despite the growth in financial asset investments, there is a significant under penetration of financial products in the Indian
market. A large portion of the population remains underserved or unserved by the formal financial sector. The penetration of
mutual funds are limited in India compared to global peers. The current penetration is at ~15% in India vs a global average of
~74%11. With ~42 million unique12 investors, mutual funds’ penetration in India covers less than 5%13 of the working-age population
at very low-ticket sizes. This under penetration presents a substantial opportunity for growth in the financial services industry.
As more people gain financial literacy and the government pushes for financial inclusion, the demand for financial products and
services is expected to rise. This offers a huge potential for financial institutions to expand their customer base and for the market
to grow in both depth and breadth.

2.2 Revolutionizing markets: welcoming the new “affluent” customer

In the prevailing opportunity for growth in the financial services industry, India is witnessing the emergence of a new investor
base. There are drastic shifts in investor segments, marked by the rising investable wealth of the affluent investor and the
emergence of new high-net-worth and ultra-high-net-worth indivisuals, driven by start-up boom, entrepreneurship and
investment returns.

Money in motion 17
 2.2.1 A new era: changing investor demographics
The investor base in the Indian capital market has shifted significantly from institutional to retail investors. This shift is driven
by digitalization that simplifies trading, a young and financially literate population, regulatory reforms by SEBI to protect and
encourage retail participation and a variety of accessible financial products like mutual funds and ETFs. The Indian capital
market has experienced significant growth, especially during and after the COVID-19 pandemic, with an influx of retail investors.

Changes in investor demographics Figure 10

+ B30 cities
• Beginner/conservative
• Low ticket size products
T30 cities
• Assisted digital
• Goal based investing
+ • Trust & transparency
• Requires advise/assistance

• Emphasis on knowledge & information

+ Millennials & Gen Z

Aged • Digitally savvy/DIY
• Conservative
• Traditional
products
• Trust & transparency
• Requires
advise/assistance
+ • Preference for personalisation &
experience
• Emphasis on knowledge &
information

Corporates and HNIs

• Personalised • Specialised/complex

+
service products + Mass
• Dedicated RMs • Value added service • Beginner/Conservative
• Low ticket size products
• Trust & transparency
• Requires advise/assistance

Source: EY internal research

The customer base has undergone a significant transformation across key demographic dimensions, including age, income, and
geography. This shift has resulted in the emergence of distinct customer segments, each with unique attributes and financial
requirements. Younger clients tend to demonstrate higher levels of digital literacy, an openness to innovation, and a greater
tolerance for risk, while older cohorts often prioritize wealth preservation and stability. Affluent professionals generally seek
long-term growth strategies and retirement planning solutions, whereas ultra-wealthy business owners typically focus on legacy
planning, tax optimization and diversification.
Furthermore, the life goals and preferences of these segments vary considerably. Younger clients often prioritize short- to
medium-term financial objectives, such as property acquisition or business investments, while older clients may emphasize
estate planning, philanthropy and securing wealth for future generations. Geographical factors further contribute to these
variations, with urban clients typically having access to more advanced financial products compared to those in rural or semi-
urban regions.
Given this diversity, wealth management firms can no longer adopt a standardized approach. Instead, they must implement
highly personalized strategies, customizing their services to align with the specific needs, preferences, and financial objectives
of each client segment. This includes offering differentiated products, personalized financial planning, and specialized
investment solutions designed to address varying degrees of digital proficiency, risk tolerance and life aspirations across the
customer base.
In this increasingly complex landscape, the ability to deliver tailored solutions that resonate with each client’s unique profile is
critical to maintaining relevance and driving sustained growth in the wealth management industry.

18 Money in motion
Illustrative: Millenial Persona – Trends, behaviour and preferences Figure 11

Biography Key Millennial

investment trends*
He began his professional journey at a (FY 2019 – 23)
corporate organization. He enjoys his work
and loves to travel. He is a firm believer in
50-20-20-10 rule (Needs – 50%; Wants – 20%;
Savings – 20%; Personal development – 10%) 85+ lakh
New millennial
registrations
Financial profile
• Salaried employee
• Outstanding house and car loan 1,5 Crore+
Age: 31 • Investment horizon is usually short to # of SIP registrations
Role: Finance Graduate mid-term (FY19 to FY23)
Location: Mumbai, Maharashtra
Goals
Born between 1981-1996 ₹ 1+
• Financial independence Lakh Crore
• Savings and Tax planning Cumulative money
Digital Native • Annual vacation invested
• Retirement planning
Risk Taker • Aspires for better standard of living
54%
Drivers for MF investment Share of new
investor base
I aim to achieve a • Finfluencers
• Align income growth with inflation
current balance • Potential for higher return ~29%
between work and • Lack of time for research
Share of total SIP
leisure while also • Fund managed by a reliable professional
registrations
• Discount brokerage platforms
planning for a
peaceful retirement Technology adoption ₹ 96K+ Crore
Very high
AuM
(as at Mar 2023)

Source: CAMS, EY internal research

2.2.2 The rising relevance of “affluent” investors in India

Wealth managers of all sizes are intensifying their focus on the mass-affluent segment as part of their long-term strategy to
maintain competitiveness and ensure profitability. This shift is driven by the recognition that mass-affluent investors represent
a growing and increasingly sophisticated client base with significant potential for wealth generation. The expected household
income of the affluent segment is projected to increase from approximately US$450 billion to US$800 billion, covering over
three million households.
To meet the evolving demands of this segment, wealth managers are rethinking traditional approaches, offering tailored
solutions that align with the specific preferences of mass-affluent investors, who favor accessible, cost-effective and goal-driven
financial products.
Mass-affluent investors increasingly seek investment products with low minimums and fees, enabling participation in wealth-
building strategies without substantial capital barriers. Additionally, platforms providing seamless access across digital and
mobile channels have become essential, as this segment expects flexibility and convenience in managing their investments.
Despite the rise of digital solutions, human advice remains highly valued, particularly for addressing long-term life goals such as
retirement planning, education funding and wealth transfer. This personalized guidance is critical for mass-affluent investors to
navigate complex financial landscapes and achieve their broader financial objectives.
In response, banks and wealth managers are integrating services and solutions that were previously reserved for distinct client
segments, particularly ultra-high-net-worth individual, and extending them to the mass-affluent. This includes democratizing
access to sophisticated products such as alternative investments, real estate and private credit strategies. By providing these
previously exclusive opportunities, wealth managers enable mass-affluent investors to diversify their portfolios and enhance
their potential returns.

Money in motion 19
 Snapshot of integrated solutions provided by wealth management firms Figure 12

1 2 3
Financial Model Mutual
advice portfolios funds,
ETFs

4 5
Goal
Planning Loans

6 7 8
Retirement Thematic
Stocks
Planning portfolios

9 10
Alternative Insurance
strategies

Source: EY internal research

To remain relevant and competitive, wealth managers must prioritize building sustainable advisory relationships that evolve in
tandem with the changing financial goals and preferences of the mass-affluent segment.

1. Hyper-personalization of services:
Restructuring advice models for hyper-personalization, supported by efficient CRM tools, not only improves client retention
but also ensures seamless service delivery regardless of the advisor-client interaction.
2. Technology-driven solutions/platforms:
Millennials prefer tech integration for investing. Wealth managers should invest in platforms that offer a comprehensive
view of portfolios, investment performance, and other key insights.
3. Operational transformation:
Enhancing mid- and back-office operations allows advisors to focus more on client engagement, understanding their needs,
and assessing risk profiles, rather than administrative processes like onboarding.
4. Informed decision-making:
Beyond managing investments, wealth managers can provide macroeconomic insights and market analyses to help
investors make informed decisions and understand the impact on their portfolios.
5. Technology-driven financial ecosystems:
Wealth managers should offer integrated ecosystems that encompass banking services (e.g., payments, lending) and
insurance, complementing traditional investment management offerings.
Furthermore, wealth managers must ensure that their offerings remain accessible through both digital and personalized service
channels, while maintaining the flexibility to adjust to the dynamic financial journeys of mass-affluent clients.
[In this highly competitive landscape, the ability to meet the diverse and evolving needs of mass-affluent investors will be a key
differentiator. Wealth managers who successfully combine personalized human advice, digital accessibility and a comprehensive
range of investment options will be well-positioned to thrive in this growing and complex market segment.]

20 Money in motion
2.2.3 Bharat checks-in: the focus on tier 2 and tier 3 city investors
Demonetization was the push needed to shift client preferences towards digital investment channels, further catalyzed by social
distancing during the COVID-19 pandemic.

Financial transactions by volume Figure 13

5%
9%

23%

41% 38%
50%

95%
91%

77%

59% 62%
50%

FY17 FY18 FY19 FY20 FY21 FY22

Digital transaction Non-digital transaction

Note: Data is for financial year ended March

Source: RBI, CRISIL MI&A Research via “The big shift in financialization”- CRISIL, December 2022

Tier 2 and tier 3 cities of India are equally part of the wealthtech boom as the tier 1 cities of the country. These cities boast
legacy wealth and newly created wealth of the affluent and upper-affluent young population. As India grows economically,
coupled with increased infrastructure development, connectivity and investments, the tier 2 and tier 3 cities are actively seeking
investment opportunities beyond gold and real estate and embracing low-cost wealthtech solutions to access these investment
opportunities easily. Amid the rise in demand for wealth advisory, wealthtechs are addressing the challenges of lack of trust
and limited awareness of non-traditional investment products and strategies. They are investing time and resources to increase
financial literacy in tier 2 and tier 3 cities to strengthen their customer base impact.

Money in motion 21
 Share of Mutual Fund AUM in top 30 (T30) cities vs. Beyond 30 (B30) cities Figure 14

10.0%
19.0% 21.0% 21.0%
25.0% 27.0% 26.0% 26.5%

90.0%
81.0% 79.0% 79.0%
75.0% 73.0% 74.0% 73.5%

FY17 FY18 FY19 FY20 FY21 FY22 FY 23 FY24

T30 B30

Note: Data is for financial year ended March

Source: RBI, CRISIL MI&A Research via “The big shift in financialization”- CRISIL, December 2022

One of the HNI-focused mutual fund distributors, AUM, from tier 2 cities surged to INR3,500 crore14 by FY23
from INR814 crore in the pre-COVID period. In terms of mutual funds investment, the AUM share of smaller
cities has grown from a mere 2.55% in 2014 to 17.44% in 202315, as per AMFI.

“Wealth management firms go beyond metros to tap post-Covid surge in demand” Business Standard, 26 June 2023
14

“Wealth Beyond Tier-1: 3 fundamentals of Bharat’s small-city HNIs”- Waterfield Advisors, 5 April 2024
15

22 Money in motion
Money in motion 23
 3
Wealth management in the
digital age: the power of
tech transformation
24 Money in motion
 The digital era has fundamentally transformed wealth management through the integration of
advanced technologies like AI and big data analytics, leading to the rise of robo-advisors and
democratizing access to investment services. Clients now enjoy enhanced experiences with
real-time portfolio access and expect greater transparency and convenience. The industry
has also adapted to include blockchain and emphasized cybersecurity and developed hybrid
models combining tech efficiency with human expertise.

Advantages of wealthtech solutions Figure 15

Increased accessibility Personalization

5 6
Adherence to regulatory compliance Cost savings
4 7

Increased revenue potential Enhanced user experience

3 8

Advantages of
Better risk management
wealthtech solutions Stronger security
2 9

Higher efficiency 1 10 Improved transparency

Source: AppInventiv

3.1 Next-gen wealth: redefining the role of

relationship managers
The digital transformation of wealth management in India is altering the way wealth managers
and clients interact by making the relationship more data-driven, transparent and personalized.
It enables wealth managers to provide value to their clients and manage relationships more
effectively through the use of advanced technology. Wealthtech companies leverage digital
platforms to interact with clients. This includes the use of mobile apps, websites and social media
to provide real-time updates on investments, market trends and personalized advice. These
platforms allow for more frequent and convenient communication between advisors and clients.
The tech-savvy Indian population is increasingly embracing these platforms, driven by the
government’s Digital India initiative, a burgeoning affluent segment with disposable income
and a massive young demographic that is comfortable with technology. With India’s high
mobile penetration (77% as of early 2023)16 and a fintech sector in full bloom, these automated
investment platforms offer an affordable, convenient and regulated option for diversifying
beyond traditional assets like gold and real estate.
In India, there is a diverse range of clients with varying levels of comfort with technology. The
introduction of automated tools and robo-advisors has made investment advice more accessible
and affordable. These tools can manage portfolios, rebalance assets and provide investment
recommendations with minimal human intervention, allowing wealth managers to focus on more
complex tasks and client relationships.
The educational tools provided by robo-advisers align with the country’s focus on financial
literacy, while their tax optimization strategies cater to India’s complex tax system. Additionally,
the cultural shift towards financial self-reliance and the need for convenient investment solutions
in fast-paced urban lifestyles, along with the ability of NRIs to manage investments remotely,
further fuel the adoption of digital channels for wealth management in India.

16
“Data Portal- Global Digital Insights

Money in motion 25
 Digital platforms for ultra-high-net-worth individuals (UHNWIs) provide highly customized, sophisticated investment services
using advanced algorithms, with a focus on complex investment strategies, estate planning and tax optimization. These
platforms offer enhanced security, privacy, and integration with existing wealth management systems, catering to the unique
needs of UHNWIs, such as global investment opportunities, philanthropy management and concierge-like services.
While digital platforms and robo-advisory deliver convenience and real-time analytics, UHNWIs often prefer a hybrid approach
that combines the technological benefits of wealthtech solutions with the personalized expertise of traditional wealth managers
for more nuanced financial decisions. The need for a hybrid-advisory model and hyper-personalization of services in India
mirrors global trends. This stems from the country’s diverse population with varying financial literacy and technological comfort,
the importance of personal relationships in financial dealings, and uneven digital penetration. Millennials hold the highest share
investable wealth, and are both tech-savvy like the GenZs and value the human touch in wealth advisory like baby boomers,
making the hybrid-model an essential channel of advice. These investors want wealthtechs to leverage emerging technologies
like AI, machine learning (ML) and big data analytics to gain insights into client behavior, preferences, and risk tolerance, and
to enable advisors to tailor their advice and investment strategies to the individual needs of each client, fostering a more
personalized relationship with a human touch.

3.2 Standing out in the age of personalization: hyper-personalized

investment strategies
The millennials and GenZs demand hyper-personalized advisory services in this advanced tech era where they receive hyper-
personalized services in other areas of their lives like their shopping services, streaming services. Wealth management firms
and wealthtechs are deploying GenAI to drive hyper-personalization in wealth advisory services through advanced data
analysis, predictive analytics and behavioral finance insights to tailor investment strategies to individual client profiles. The
customer engagement layer incorporates customization and hyper-personalization through features such as personalized
landing pages, AI-driven dynamic risk profiling, interactive gamified experiences, life-stage-based goal planning, needs-based
portfolio rebalancing, comprehensive portfolio analytics and reporting, one-click model purchases and customer model
portfolio advisory services
Machine learning is enabling them to anticipate client needs and market trends, while robo-advisors automate portfolio
adjustments in real-time.

Varied needs of customers being powered through GenAI Figure 16

Powered by Markets, News

External data

Millennial GenAI
Buy a car
Community, events

Products & services

API Layer

Grow my
Mass money
Affluent
Customer Profile
Internal data

Human like
interaction –
Assets and Liabilities
Plan for voice/text/
Aged HNI images
retirement
Your financial
companion
Behavioural Analytics

Source: EY internal research

26 Money in motion
Wealth management firms are currently focused on delivering an intelligent, personalized and intuitive wealth management
platform, powered by GenAI, to democratize high-net-worth individual services for the mass affluent segment.
Wealthtechs have incorporated natural language processing into their chatbots, which enhances client interactions, giving
them a more humanized conversation experience with data-driven responses. AI-driven financial planning tools consider the
full spectrum of a client’s financial situation and life-events like children’s education, marriage or retirement specific to them
and then suggests investment strategies. Wealthtechs use AI for more granular client segmentation and more personalized
investment product suggestions.
This enhanced personalized advisory provides the human advisor with more insights to build a better relationship with a client.
Continuous learning from client interactions refines the personalization process, and the integration of external data sources
provides a comprehensive view of client preferences and market influences, ensuring that wealth management services are
more relevant, timely and effective than ever before.

Money in motion 27
 3.3 Robo-advisory: an evolution of wealth management proposition for
the mass affluent segment
India is rapidly advancing its wealthtech sector through a robust digital ecosystem, underpinned by initiatives like Digital India,
which aim to digitalize the nation’s infrastructure. The introduction of the Unified Payments Interface (UPI) has revolutionized
financial transactions, providing a solid foundation for fintech and wealthtech platforms.
The wealth management landscape has evolved from traditional distribution through physical channels to a modern, unbundled
wealth stack delivered via digital channels, encompassing key stages such as onboarding, risk profiling, curated portfolios,
heldaway analytics rebalancing, etc.
Despite these advancements, the ultimate objective remains to provide integrated and hyper-personalized customer wealth
journeys. This is achieved through robo-advisory services that offer persona-based risk profiling, personalized financial
management with income and expense analytics, consolidation and recommendations on heldaway assets, goal-based
automated investing, and interactive dashboards. Additionally, these journeys are enhanced by educational resources, learning
materials, and 24/7 customer support via GenAI-powered chatbots. The industry is progressively aligning with this vision by
integrating these capabilities into their customer journeys, supported by GenAI and robust digital infrastructure

Evolution of wealth management proposition for mass affluent segment Figure 17

North Star

Distribution Unbundled wealth Integrated & hyper personalised

through stack via digital customised wealth journeys
physical channels
channels
Personalized
Digital onboarding
landing page
Multi-factor based
risk profiling Goal tracking
and portfolio Persona
rebalancing based risk
Generic models and 07 profiling
curated portfolio

Analytics on Interactive 06 Robo 02

heldaways dashboards Advisory Personalized
Single view, financial mgmt.
Portfolio Performance 05 03 Income/Expense
Product rebalancing forecasting 04 analytics and
distribution and insights
Dashboards and attribution
(Stocks & MFs) consolidated view
via Automated Consolidation of
intermediary investing investments
No personalized Analytics and
channels based on goals
insights and advice advice on
Personalised
Generic risk profiling models held-away
and goal planning
Focussed on point in Education & learning
time investments 24/7 client support with AI chatbots

Link to the illustration

Product distribution to advisory and insights

Source: EY internal research

28 Money in motion
Money in motion 29
 4
Competitive
landscape- the
great convergence
30 Money in motion
The wealth management industry comprises a diverse range of players, including full-service
platforms, private banks, boutique firms, wealthtech platforms and brokers. Each of these
segments brings specialized expertise, catering to varying clientele across the wealth spectrum.

Competitive landscape of wealth management in India Figure 18

Segment Product offerings

• Taxation/Trust
Foreign Non-banks services
UHNI Banks wealth • Asset monetization
managers
• Investment advisory

• AIF/PMS
Private
HNI/Mass Banks • Fixed income
Affluent
• LAS and Unlisted
companies

• Equity broking
Brokers Distributors Wealthtechs • IPOs
• Equity and debt
Retail mutual funds
• Insurance and FDs

Source: EY internal research

Today, convergence within the industry is increasingly pronounced, with all players shifting their
focus toward High-Net-Worth Individuals (HNI) and affluent segments.
Traditionally, access to wealth management services for certain segments was limited, but
wealthtech firms have disrupted this space by offering sleek, digital apps that provide seamless,
user-friendly experiences, making these services more accessible than ever before.
With the growing popularity of wealthtech, these platforms are increasingly attracting the
interests of investors in the funding landscape. The year 2021 saw the highest investment
in wealthtech, mainly attributed to COVID-19, which accelerated the adoption of wealthtech
services. Along with the revival, there are Mergers & Acquisitions (M&A) and strategic
partnerships taking place between different players in the wealthtech and traditional wealth
management spaces. Reasons can be attributed to leveraging the country’s ongoing digitization
and catering to a young, tech-savvy population that is increasingly becoming financially literate.
• 360 ONE, one of the leading financial services providers, offering specialized solutions in
the fields of wealth and asset management, has agreed to acquire the wealthtech platform
ET Money17 to enter the promising wealthtech landscape.
• Wealthtech start-ups Dezerv and Stable Money secured funding of US$30 million and
US$17 million respectively in April 202418.
• Another wealthtech start-up, Fisdom, received approximately US$5 million from an existing
investor, PayU, in December last year19.
These collaborations are enabling traditional firms to access innovative technologies and
untapped markets, while wealthtechs are benefiting from established brand trust and a wider
customer reach. Both entities are diversifying their services, ensuring regulatory compliance,
and competing with global players in a market marked by a rising affluent segment, growing
wealth and the government’s focus on financial inclusion. This strategic convergence is driven
by the need to adapt to India’s unique demographic trends, its evolving digital payment
ecosystem, and the regulatory landscape that is continuously supports fintech innovation.

17
“360 One acquires ET Money for Rs 366 crore to enter wealth tech space” Economic Time, 13 June 2024
18,19
“Wealthtech start-ups Dezerv, Stable Money close fresh funding amid larger fintech stress”- Economic Times, 3 April 2024

Money in motion 31
 Convergence of business models Figure 19

WM providers

Family Boutique
office Wealth
Managers

UHNW Foreign Banks

Full-service firms

HNW Domestic Banks

Brokers Anticipated
area of industry
Mass Digital wealth platforms
convergence
affluent
Independent Advisors / Registered
Investment Advisors
By
investible Depth of advice offering
assets

Source: 2022 Wealth and Private Banking: Future of Advice, EY internal research

Key trends driving this convergence include strategic pursuits of cost-income efficiencies, exits from non-core markets and
restructuring initiatives. Many firms are integrating retail, wealth and private banking services into unified offerings to attract a
broader client base.
However, as firms consolidate services and expand their reach, they face the challenge of tailoring their offerings to diverse client
segments, each with unique needs and preferences. Balancing the demand for personalized, relationship-based services with
scalable digital solutions is critical to maintaining competitiveness in an increasingly diverse and digitally connected market.

Funding space
Deals in the overall wealthtech in theinoverall wealthtech
India (US$ million) space in India (US$m) Figure 20

93

70

34

26
21

2018 2019 2020 2021 2022 2023

Source: “Unlocking Indian Enterprise Fintech Market”, - Chiratae Ventures, 2024

32 Money in motion
Money in motion 33
 5
Evolving regulatory
landscape
34 Money in motion
The wealthtech industry in India has been growing rapidly, and with this growth, regulatory
bodies like the SEBI and the Reserve Bank of India (RBI) have been updating regulations to
ensure investor protection, market integrity and financial stability. As the sector continues to
grow, with advancements in technology and the emergence of innovative business models, the
evolving regulatory landscape may address new challenges and unlock opportunities.

Understanding the changing regulatory landscape in India

Wealthtech services, depending on the nature of services, fall under the SEBI (Investment
Advisers) Regulations, 201320or SEBI (Research Analysts) Regulations, 201421. Wealthtechs
that offer stock broking services fall under the SEBI (Stockbrokers) Regulations, 199222.
SEBI has introduced regulations to ensure that only registered investment advisors (RIAs)
can provide personalized investment advice. Wealthtech firms registered with SEBI as
investment advisors must comply with the regulatory framework that includes qualifications,
certification requirements and adherence to a code of conduct. SEBI has also issued
guidelines for robo-advisory services, which require transparency, disclosure of algorithms
used and human intervention in advisory services.

An overview of the regulatory landscape impacting wealthtechs* Figure 21

Type of wealthtech Services provided

An EOP is a digital or online platform which facilitates
transactions, such as subscription, redemption and switch
transactions in direct mutual funds schemes. The SEBI has made
it compulsory for EOPs to get registered with the regulators and
Execution Only barred them from offering regular plans of mutual funds schemes
Platforms (EOPs) as part of the new regulatory framework introduced for such
platforms for direct mutual fund investing. As per the SEBI, no
entity would be allowed to operate as an EOP without obtaining
registration from SEBI or the Association of Mutual Funds in India
(AMFI), as the case may be.
These regulations govern the activities of investment advisers in
India, requiring them to register with SEBI and adhere to specified
SEBI (Investment
qualifications, capital adequacy, and conduct regulations.
Advisers) Regulations,
Wealthtech platforms offering investment advice must ensure
2013 (and subsequent
compliance with these regulations, which could impact their
amendments)
business models, especially in terms of transparency, fees, and
the segregation of advisory and distribution services.
In May 2023 , SEBI released a consultation paper with respect to
Fractional ownership fractional ownership platforms. In the consultation paper, SEBI
platforms has proposed to regulate fractional ownership platforms on the
same lines as it regulates “real estate investment trusts”

The RBI and SEBI have introduced regulatory sandbox frameworks that allow fintech and
wealthtech companies to test their products in a controlled environment with real customers,
but with certain relaxations in regulatory requirements. This helps wealthtech companies
innovate and develop new products while ensuring that they are viable and compliant with
regulations before a full-scale launch. SEBI has rejected sandbox applications of wealthtech
platforms for products such as fantasy stock games, investment in fractional shares, and use
of distributed ledger technology to improve the settlement process, indicating SEBI’s cautious
approach towards the entry of players into the wealthtech space.
Furthermore, SEBI is concerned about the data risks that are associated with usage of
advanced AI tools by investment advisors (IA) and research analysts (RA). In its recent
consultation paper23, SEBI has suggested that an IA/RA who uses AI tools for servicing its
clients must provide complete disclosure of the extent of use of such tools to its prospective
clients, to enable them to take informed decisions of continuance or otherwise with the IA/RA.

“Fintech Laws and Regulations 2023”- Global Legal Insights

20,21,22

Investment advisers, analysts must disclose AI tool usage to clients: Sebi

23

*The list of regulations is not exhaustive.

Money in motion 35
 Benefits of recent regulatory changes Figure 22

Enhanced regulations ensure that Clear regulatory frameworks help in

wealthtech platforms operate maintaining the integrity of financial
with greater transparency and markets by preventing fraudulent
accountability, safeguarding Investor Market activities and ensuring that all market
investor interests. protection integrity participants adhere to the same rules.

Regulations can be designed to Regulatory changes often aim

encourage innovation by providing to make financial services more
a clear legal framework within accessible to a broader segment of
which new wealthtech services can Innovation Financial the population, which can lead to
be developed. catalyst inclusion increased financial inclusion.

Regulations may require wealthtech With the rise of fintech and

firms to implement robust risk wealthtech, data security
management practices, which can regulations are crucial to protect
help in preventing systemic risks and Risk Data sensitive financial information from
protecting the financial system. management security cyber threats.

Source: EY Insight analysis

Along with benefits, regulatory changes can also have negative implications. Regulatory changes can lead to increased
compliance costs, impacting profitability and operational challenges. They can also create barriers to entry and lead to
consolidation among smaller players who might find adhering to increased regulatory requirements cumbersome.

The future impact of regulatory developments

To positively impact wealthtechs in India, regulations should evolve to foster innovation while ensuring consumer
protection and financial stability. This could involve establishing a regulatory sandbox for start-ups to test products,
providing a clear regulatory framework for digital wealth management, updating data protection laws, implementing
robust cybersecurity standards, streamlining KYC processes with digital solutions and encouraging an open API
ecosystem. Additionally, initiatives for financial literacy, tax incentives for investments in wealthtech, cross-border
regulatory collaboration, strengthened consumer protection laws, fintech-friendly policies that promote partnerships
with traditional financial institutions, and support for sustainable and ethical investing are crucial. Such measures would
balance the need for innovation with consumer protection, contributing to a thriving wealthtech sector in India.

36 Money in motion
Money in motion 37
 6
Shaping tomorrow:
the future of wealth
management in India
38 Money in motion
Wealth management in India is transforming with rapid growth. By embracing digitalization,
expanding their reach to new investor segments, and navigating the regulatory landscape
adeptly, wealth management is redefining its service and experience for millions of Indians.

Transition of wealth management sector in

India towards a robust operating ecosystem Figure 23

2 4 6
Transition from Expansion to underserved Strategic partnerships
product focused- demographics, enhancing between agile wealthtech
model to solution- financial literacy and startups and entrenched
focused model inclusion financial institutions

1 3 5
Shift towards hyper- Strike a balanced Harness cutting-edge
personalised services approach with ‘phygital’ tech to refine and amplify
with heightened advisory model operational efficiency
engagement
Source: EY insights analysis

These newer trends are creating underlying challenges for wealth managers who need to
address them to create value for clients, stakeholders and the society.

Money in motion 39
 To maintain their edge in the future, incumbent wealth managers must:
1. Reimagine customer journeys: Design intuitive, seamless and engaging customer journeys by embedding valuable insights
and relevant information at every touchpoint. Collaborate closely with vendors for efficient data capture, streamlined
payment processes and responsive service functions. This integrated approach aims to reduce drop-offs and significantly
enhance the overall user experience, ensuring a smooth and satisfying client journey from start to finish.
2. Personalized wealth solutions for life needs: Develop an engagement model that is customized to each customer’s unique
needs, preferences and life circumstances, avoiding generic product sales. Leverage artificial intelligence and detailed
client insights to create personalized solutions that align with their individual life journey. This approach ensures that each
interaction is relevant, meaningful and effectively supports their financial goals.
3. Future of advice: Implement a hybrid model that combines part-digital and part-physical offerings, effectively merging
digital interfaces with human services to ensure seamless interoperability. Clients increasingly value tailored engagement
features and are willing to invest in them. Firms can capitalize on this trend by monetizing differentiated advisory
solutions, delivering a cohesive experience that integrates digital convenience with personalized human interaction.
4. Operating model simplicity: Effectively integrate optimized administrative workflows, sophisticated data management
systems, and enhanced client engagement protocols, alongside cutting-edge technology. This approach aims to streamline
wealth management operations, boost operational efficiency, and provide comprehensive, tailored client services. By
synchronizing these elements, firms can improve service delivery, enhance client satisfaction and drive overall operational
effectiveness.
5. Build future-proof technology and data infrastructure: A strategic framework integrates scalable technology
infrastructures, sophisticated data management systems, and state-of-the-art cybersecurity protocols with strategic
vendor partnerships and advanced AI capabilities. This comprehensive approach aims to enhance the client experience in
wealth management by ensuring robust security, efficient data handling and seamless technology integration. It supports
delivering personalized, secure and effective wealth management services.
6. Meeting complex investment needs with financial innovation: Clients with intricate and nuanced risk-return profiles
demand solutions beyond conventional offerings. To address their unique needs, it is essential to develop and deploy
alternative investments, structured products and sophisticated wrapper solutions. These advanced financial instruments
provide tailored approaches that effectively meet complex investment requirements, offering greater precision in
managing risk and optimizing returns.
7. Segment-specific differentiated offerings: Establishing a broad market footprint across various client segments—mass
affluent, high-net-worth individuals (HNI), and ultra-high-net-worth individuals (UHNI)—requires a hybrid model that
combines robo-advisory solutions with high-touch relationship management. This approach balances cost efficiency
with personalized service, enhancing market penetration and creating opportunities for upselling. By integrating these
methods, firms can effectively address diverse client needs and expand their reach.
8. Essential emphasis on regulatory compliance: Wealth models must be both adaptable and compliant, providing the
flexibility to adjust to changing regulations and guidelines. They should maintain transparency in their processes,
methodologies and organizational structures. Any modifications should be accompanied by clear and well-supported
rationale, ensuring that adjustments are not only compliant but also well-understood and justifiable within the context of
evolving financial regulations.

Overall, the wealth management landscape in India is poised to become more dynamic, inclusive and efficient by leveraging
cutting-edge technologies to offer cost-effective, personalized and secure wealth management solutions to a wider audience.

40 Money in motion
Money in motion 41
 Acknowledgments
Core Team:

Saurabh Joshi Nilesh Naker

Partner, Partner,
Financial Services Consulting Technology Consulting

Vishal Madia Shishir Mankad

Partner, Partner,
Financial Services Consulting Financial Services
Strategy and Transactions

Vivaan Madhok Chetna Khanna

Senior, Senior,
Financial Services Consulting Technology Consulting

Rishi Agarwal Gaurav Kadakia

Senior, Senior,
Financial Services Consulting Financial Services Consulting

Insights team:

Karan R Teluja Jyoti Bachwani

Global FS Senior Analyst, Global WAM Analyst,
Insights Insights

Shristi Sarda Vaibhav Mishra

Global FS Senior Analyst, Global FS Analyst,
Insights Insights

42 Money in motion
Our Offices

Ahmedabad 3rd & 6th Floor, Worldmark-1 3rd Floor, Unit No 301
22nd Floor, B Wing, Privilon IGI Airport Hospitality District Building No. 1
Ambli BRT Road, Behind Iskcon Temple Aerocity, New Delhi - 110 037 Mindspace Airoli West (Gigaplex)
Off SG Highway Tel: + 91 11 4731 8000 Located at Plot No. IT-5
Ahmedabad - 380 059 MIDC Knowledge Corridor
Tel: + 91 79 6608 3800 4th & 5th Floor, Plot No 2B Airoli (West)
Tower 2, Sector 126 Navi Mumbai - 400708
Bengaluru Gautam Budh Nagar, U.P. Tel: + 91 22 6192 0003
12th & 13th Floor Noida - 201 304
“UB City”, Canberra Block Tel: + 91 120 671 7000 Pune
No.24 Vittal Mallya Road C-401, 4th Floor
Bengaluru - 560 001 Hyderabad Panchshil Tech Park, Yerwada
Tel: + 91 80 6727 5000 THE SKYVIEW 10 (Near Don Bosco School)
18th Floor, “SOUTH LOBBY” Pune - 411 006
Ground & 1st Floor Survey No 83/1, Raidurgam Tel: + 91 20 4912 6000
# 11, ‘A’ wing Hyderabad - 500 032
Divyasree Chambers Tel: + 91 40 6736 2000 10th Floor, Smartworks
Langford Town M-Agile, Pan Card Club Road
Bengaluru - 560 025 Jaipur Baner, Taluka Haveli
Tel: + 91 80 6727 5000 9th floor, Jewel of India Pune - 411 045
Horizon Tower, JLN Marg Tel: + 91 20 4912 6800
Bhubaneswar Opp Jaipur Stock Exchange
8th Floor, O-Hub, Tower A Jaipur, Rajasthan - 302018
Chandaka SEZ, Bhubaneswar
Odisha – 751024 Kochi
Tel: + 91 674 274 4490 9th Floor, ABAD Nucleus
NH-49, Maradu PO
Chandigarh Kochi - 682 304
Elante offices, Unit No. B-613 & 614 Tel: + 91 484 433 4000
6th Floor, Plot No- 178-178A
Industrial & Business Park, Phase-I Kolkata
Chandigarh - 160 002 22 Camac Street
Tel: + 91 172 6717800 3rd Floor, Block ‘C’
Kolkata - 700 016
Chennai Tel: + 91 33 6615 3400
6th & 7th Floor, A Block,
Tidel Park, No.4, Rajiv Gandhi Salai Mumbai
Taramani, Chennai - 600 113 14th Floor, The Ruby
Tel: + 91 44 6654 8100 29 Senapati Bapat Marg
Dadar (W), Mumbai - 400 028
Delhi NCR Tel: + 91 22 6192 0000
Ground Floor
67, Institutional Area 5th Floor, Block B-2
Sector 44, Gurugram - 122 003 Nirlon Knowledge Park
Haryana Off. Western Express Highway
Tel: +91 124 443 4000 Goregaon (E)
Mumbai - 400 063
Tel: + 91 22 6192 0000

Money in motion 43
 Ernst & Young Associates LLP
EY | Building a better working world

EY exists to build a better working world, helping to create long-

term value for clients, people and society and build trust in the
capital markets.

Enabled by data and technology, diverse EY teams in over 150

countries provide trust through assurance and help clients grow,
transform and operate.

Working across assurance, consulting, law, strategy, tax and

transactions, EY teams ask better questions to find new answers
for the complex issues facing our world today.

EY refers to the global organization, and may refer to one or

more, of the member firms of Ernst & Young Global Limited,
each of which is a separate legal entity. Ernst & Young Global
Limited, a UK company limited by guarantee, does not provide
services to clients. Information about how EY collects and uses
personal data and a description of the rights individuals have
under data protection legislation are available via ey.com/
privacy. EYG member firms do not practice law where prohibited
by local laws. For more information about our organization,
please visit ey.com.

Ernst & Young Associates LLP is one of the Indian client serving
member firms of EYGM Limited. For more information about our
organization, please visit www.ey.com/en_in.
Ernst & Young Associates LLP is a Limited Liability Partnership,
registered under the Limited Liability Partnership Act, 2008
in India, having its registered office at 6th Floor, Worldmark-1,
Asset Area 11, Hospitality District, Indira Gandhi International
Airport, New Delhi-110037, India.

©2024 Ernst & Young Associates LLP. Published in India.

All Rights Reserved.

EYIN2408-021
ED None

This publication contains information in summary form and is

therefore intended for general guidance only. It is not intended
to be a substitute for detailed research or the exercise of
professional judgment. Neither EYGM Limited nor any other
member of the global Ernst & Young organization can accept
any responsibility for loss occasioned to any person acting
or refraining from action as a result of any material in this
publication. On any specific matter, reference should be made to
the appropriate advisor.

SA1

ey.com/en_in
@EY_India EY EY India EY Careers India @ey_indiacareers

44 Money in motion