A new report issued on Monday shows that India's richest 1 percent has invested close to 60 percent of their holdings in real estate and gold, pointing to the ongoing dominance of physical assets over investment choices of the super wealthy.
This elite group comprises Ultra High Net Worth Individuals (UHNIs), High Net Worth Individuals (HNIs), and the rich class. Earning just 1 percent of Indian households, they together possess nearly 60 percent of India's total assets, as per US-based wealth advisory firm Bernstein.
The report puts the total household wealth of India at $19.6 trillion, of which $11.6 trillion, or 59 percent, falls in the hands of this narrow elite segment. Impressively, this cohort owns 70 percent of the country's financial assets.
But of that wealth, just a small portion—about $2.7 trillion—is committed to actively managed or readily re-deployed financial instruments like mutual funds, equities, insurance products, and deposits. The remainder, estimated at $8.9 trillion, is locked into non-serviceable assets like cash, gold, promoter equity, and property.
This distribution holds the promise for asset management firms. With the affluent Indian families looking to shift away from conventional investments such as property and gold, professional wealth managers can potentially grow their Assets Under Management (AUM) in the next ten years.
Bernstein comments that much of financial wealth is beyond the reach of organized wealth management services. In a previous study, the company saw that formal wealth advisors were advising only 11 percent of the country's pool of liquid financial assets.
The report also provides insights into India's overall inequality picture. It points out that while income inequality is high, wealth concentration is even higher. "The top 1 percent receives 40 percent of all income, while the 'Rest of India' has a tiny share of both income and wealth," the report stated.
Within this group are about 35,000 Ultra High Net Worth households, with a combined asset value of more than $12 million (about ₹100 crore) each. These households on average have $54 million (₹472.5 crore) in assets, of which $24 million (₹210 crore) is invested in financial assets.
As a group, this high net worth class holds $4.5 trillion in financial assets, which is equal to 70 percent of the nation's total financial wealth, the report concluded.
Read also| India Dismisses UK Parliamentary Committee Report as 'Baseless and Dubious'
Read also| Technical Snag Halts Air India Dreamliner’s Delhi-London Take-Off
