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Ultra HNI segment set to treble: Report

The number of ultra high networth individuals (UHNIs) is expected to treble to 2,19,000.

Written by Agencies | Mumbai |
June 7, 2011 7:22:34 pm

The number of ultra high networth individuals (UHNIs) is expected to treble in the next five years to 2,19,000 which will also see the combined networth of those under this category to grow five times to over Rs 235 trillion,a report said.

“Because of liberalisation and general economic growth,there is bound to be an increase in the ultra HNI segment,” ratings agency Crisil’s Managing Director and Chief Executive Roopa Kudva told reporters here today.

Kudva said in the report–Top of the Pyramid—that Crisil and Kotak Wealth Management have set a networth of over Rs 25-crore or USD 5 million as the benchmark for qualifying into the UHNI segment.

She added that the projection is based on a minimum growth of 7.5 per cent in the GDP every year which will surely happen for “decades to come”.

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At present,90 per cent of the UHNIs wealth resides in the top 10 cities of the country,Kudva said,adding that going ahead,the growth will come more from the smaller towns which constitute a minority now.

The report based on analysis of the government data and interviews of luxury brand managers and existing UNHIs says a majority (37.2 per cent) of the investible surplus is deployed in the real estate sector followed by equities (33.1 per cent),20.4 per cent in debt and 9.2 per cent in alternate assets.

The survey,which divides the UHNIs into three categories of inheritors,self-made and professionals,also found that a majority of purchases done by those in the segment are not impulsive,but planned.

Inheritors like to plan extensive holidays while on the impulsive buying front,a sizable chunk is devoted to buys like writing instruments and liquor,Kudva said.

In an interesting find,the survey also found that a majority of inheritors prefer travelling economy class while the professionals (which include corporate executives,lawyer,doctors and accountants) fly business class a lot more.

In another trend,the survey has found that only 50 per cent of the investment decisions are driven by professional advice,Kudva said,adding that Crisil sees this number increasing significantly and a greater demand for such services.

Kotak Mahindra Bank’s Executive Director,C Jayaram said the bank’s wealth management practice will achieve a 25 per cent growth in its assets under management over the present Rs 15,600-crore in FY 12 on account of more client additions. It serves 1,700 families at present.

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