Indian wealth management pivots to regional cities and cross-border portfolios
As wealth creation accelerates in India’s smaller cities and cross-border investing grows, wealth managers are adapting their advisory models, signaling a shift in emerging market capital flows that European investors must monitor.
Wealth creation in India is rapidly expanding beyond its six major metropolitan areas, driving a surge in high-net-worth and ultra-high-net-worth individuals in Tier II and Tier III cities. According to Sandeep Das, managing director and chief executive of Centrum Wealth, the number of clients upgrading between these wealth brackets is currently doubling.
This regional dispersion is accompanied by a significant rise in cross-border wealth dynamics. Many non-resident Indians are returning to the country, attracted by expanding employment opportunities in Global Capability Centres. Simultaneously, resident Indians are increasingly diversifying their assets into developed and emerging markets.
This outward flow is facilitated by the Liberalised Remittance Scheme, though its limits are unlikely to be raised in the near term. Das noted that ongoing pressure on the Indian rupee makes any short-term expansion of these remittance ceilings improbable, a critical detail for international investors monitoring emerging market capital controls.
Adapting advisory models
To manage this complexity, wealth management firms are moving away from traditional product-led models. Centrum Wealth emphasizes a product-agnostic compensation structure for its relationship managers to eliminate conflicts of interest. This approach prioritizes long-term client needs over immediate sales targets, supported by the firm's 12 years of profitability and steady growth.
The industry now navigates three distinct client cohorts. These include traditional first-generation wealth creators, newly wealthy startup founders experiencing liquidity events, and individuals leading cross-border lives.
Serving these groups requires highly specialized advisory teams. For example, managing the portfolio of a US-based non-resident Indian demands the coordinated involvement of tax, succession, and investment specialists to navigate dual regulatory frameworks.
Behavioral finance also plays a crucial role, particularly with first-generation patriarchs and matriarchs who frequently postpone succession planning. Firms are now proactively including estate planning experts in early discussions to understand client intentions, even if the formal transition is deferred.
For European financial institutions, this evolution highlights the growing sophistication of India’s wealth management sector. As regional millionaires and cross-border investors seek tailored, jurisdiction-spanning advice, global wealth managers must refine their emerging market strategies to remain competitive.
