India's economic growth is attracting attention as it continues to showcase remarkable resilience and potential. Throughout 2024, the economics of the Indian wealth management sector have seen significant transformation as key players adapt to new challenges, opportunities, and market dynamics. Shiv Gupta, the Founder and Chief Executive Officer of Sanctum Wealth, confirmed these sentiments during the Hubbis Indian Private Wealth Management Year-End Review 2024. This year has not just been about growth but also breaching the barriers posed by skill gaps and uneven technology adoption.
Gupta remarked, "2024 was a year of continued strong growth for the Indian wealth management industry, supported by an economy on a secular uptrend and massive wealth creation." Factors contributing to this included capital markets expansion along with favorable investor behavior leaning toward risk-taking investments.
High competition has also characterized this industry, with several newcomers making their mark and significant fundraising activity taking place. The trends observed indicate heightened activity, particularly within private markets, encompassing both debts and equities - areas previously characterized by cautious strategies. These opportunities can lead to issues concerning portfolio management, risk assessment, and the importance of sound advice.
A notable challenge highlighted by Gupta was the widening talent gap. He noted, "A key challenge is the growing talent gap, with demand for skilled client-facing professionals far outpacing supply." Sanctum Wealth's strategies include attracting, nurturing, and developing top-tier talent. The need for skilled individuals is pressing as the wealth management industry evolves.
While significant advancements have been made concerning technology adoption, Gupta candidly pointed out the uneven nature of this implementation, indicating room for innovation across the sector. “These priorities aim to solidify our position amid rising competition,” he emphasized. The strategies outlined for 2025 reflect Sanctum Wealth's commitment to deepening capabilities across asset classes and innovatively enhancing its service offerings.
Concurrent to developments within the wealth management sector, voices like Veena S Rao are drawing attention to pressing demographic challenges impacting the nation. Rao articulates concerns about India's asset-less and ageing population, which is considered to be on the verge of creating systemic crises. Rather than bolstering the economy, populational growth with low education and skills could exacerbate unemployment and limit disposable incomes.
Rao presented data from demographic studies showing, "Our immediate demographic dividend...will constitute India’s work-force for the next three decades." This observation precedes projections indicating significant global employment shifts. Among the glaring statistics revealed by Rao, only 34% of adolescent girls and boys have received adequate education by age 24, with alarming levels of anemia and malnutrition highlighted.
Such findings bring forth the issue of the upcoming generation's capacity for high productivity and wealth creation. India’s overall prosperity hinges on the productivity of its workforce, which ties directly back to education and health—two foundational elements for nurturing the country's demographic dividend. Rao stresses the need for policy frameworks to adapt to and reinforce these areas, emphasizing the necessity for cognitive and physical wellness as prerequisites for sustainable economic growth.
Complementing these insights are the trends reflected in investment behavior, particularly concerning finfluencers—financial influencers on social media platforms shaping retail investor decisions. A comprehensive analysis indicated alarming trends where 72% of stock selections recommended by finfluencers failed to outperform market indices. This reality opens up discussions about the quality of financial education among new investors and the growing necessity for informed decision-making.
The experts noted, "Investing is a jounrney...grounding decisions in proven financial principles,” appearing co-authored by Dr. Jayatu Sen Chaudhury and Mihir Ujjainwal. This aligned with the recommendation from regulatory bodies to engage with registered advisors for more accountable and informed investing experiences, promoting fundamental principles over speculative trends.
With projections on economic targets set at $7 trillion by 2030 becoming more ambitious, industry experts like Gupta, alongside social commentators, stress the importance of educational reforms, technological innovations, and investment robustness. The insights from the wealth management sector are setting the tone for the future of India's economy as it steps confidently toward 2025. Sustained collective efforts will only continue to empower the wealth creation strategies needed to leverage the considerable potential of India’s demographic dividend.