**Intensifying Competition in India’s Wealth Management Sector**
The wealth management industry in India is experiencing heightened competition, driven by a significant increase in affluent households. According to the Mercedes-Benz Hurun India Wealth Report 2025, the number of dollar-millionaire households in India has surged to 870,000, a remarkable 90% increase from 460,000 in 2021. This influx of wealth has led to wealth managers competing fiercely for the same clientele, particularly targeting high and ultra-high-net-worth individuals with customized advisory services and comprehensive wealth solutions.
The growth trajectory of India’s wealth management assets is promising, with projections indicating an annual increase of 12%-14% through FY27, expected to rise from ₹33.3 trillion in FY24 to ₹47 trillion. However, this competitive landscape has impacted profit margins for leading players. For instance, 360 ONE’s net income margins have decreased from 33.3% in FY23 to 30.8% in FY25, while Nuvama Wealth, a newer entrant, has seen its margins decline from a peak of 48.3% in fiscal 2022 to 23.7%.
Vinay Ahuja, co-CEO of 360 ONE Wealth, noted that the competition is benefiting investors through reduced costs, which has led to some margin compression for wealth managers. This trend appears to be ongoing. In the second quarter of the current fiscal year, net income margins varied among listed wealth managers. 360 ONE’s margins fell to 28.3% from 28.62% year-over-year, while Anand Rathi Wealth improved to 33.41% from 31.39%. Nuvama Wealth’s margins also decreased to 22.4% from 24.51%, although they remain above their Q2 FY2024 levels.
Regulatory changes have further complicated the landscape. The Securities and Exchange Board of India (Sebi) introduced total expense ratio (TER) slabs in 2018, and a proposed overhaul of these slabs aimed at reducing investor costs is anticipated to negatively impact the industry. Ashish Kehair, managing director and CEO of Nuvama Wealth Management, indicated that the proposed changes could result in a revenue decline of ₹20-25 crore annually for his company. In response, industry peers suggest that enhancing operational efficiency may mitigate the impact of these changes.
To navigate the increasing competition and regulatory challenges, wealth managers are focusing on strengthening client relationships. This strategy includes aggressively hiring relationship managers (RMs) to onboard more clients and expand into tier-II and III cities, as well as developing proprietary products. At 360 ONE, employee costs surged to ₹285 crore in Q2 FY26, reflecting an 80% increase from the same quarter two years prior. Other listed wealth managers are also experiencing similar trends in employee expenses, driven by a robust hiring cycle for RMs.
In conclusion, the wealth management sector in India is at a pivotal moment, characterized by rapid growth and intense competition. As firms adapt to regulatory changes and strive to enhance client relationships, the landscape will continue to evolve, presenting both challenges and opportunities for wealth managers.
**FAQ**
**What factors are driving competition in India’s wealth management sector?**
The competition is primarily driven by a significant increase in affluent households, with the number of dollar-millionaire households rising dramatically, leading wealth managers to vie for the same high-net-worth clients.
