India's High-Net-Worth Individuals (HNIs), defined as those with investable assets exceeding ₹5 crore, are a rapidly growing segment, projected to nearly double to 1.65 million by 2027. Despite their affluence, many HNIs face challenges in saving and investing wisely, hindering their ability to achieve their financial goals. Several factors contribute to this struggle, ranging from a lack of financial discipline and inadequate diversification to the complexities of wealth management and evolving market dynamics.
One of the primary reasons for this struggle is insufficient savings. According to the India Wealth Survey 2025, a significant 43% of HNIs save less than 20% of their post-tax income, despite aspiring for early retirement, entrepreneurship, and financial security for their children. This disconnect between ambition and action highlights a lack of financial discipline and structured planning. Furthermore, 14% of HNIs do not maintain an emergency fund, leaving them vulnerable to unforeseen financial shocks.
Another significant challenge is the tendency to over-allocate wealth to real estate and gold. The survey reveals that over half of HNIs allocate more than 20% of their wealth to real estate, while 65% allocate 10-20% to gold and silver. While real estate has historically been a favored asset class in India, over-concentration in this illiquid asset can limit portfolio flexibility and returns. Similarly, while gold can act as a hedge against inflation, excessive allocation can hinder overall portfolio growth.
Lack of diversification is a critical issue. Many HNIs lack adequate exposure to equities and global assets, which can offer higher growth potential. The survey indicates that only 17% of HNI households with a net worth above ₹10 crore allocate more than 30% to equities. Moreover, diversified portfolios are hard to find even in the HNI community. This limited diversification exposes portfolios to unnecessary risk and reduces the potential for optimal returns.
The complexity of wealth management also poses a challenge. HNIs often have diverse assets, including trusts and listed equities, making tax planning and regulatory compliance complex. Intergenerational wealth transfers, with their associated tax implications, further complicate matters. Moreover, changing tax codes and regulatory uncertainties add to the complexity of managing substantial wealth.
Market volatility and economic uncertainty further exacerbate the challenges faced by HNIs. Global economic shifts, geopolitical risks, and domestic policy changes can significantly impact investment returns. Currency fluctuations, trade tensions, and evolving investment opportunities all contribute to market volatility, making it difficult to generate consistent returns.
Despite these challenges, there is a growing awareness among HNIs of the need for professional financial planning. A striking 82% believe that professional financial planning improves their chances of meeting long-term goals. Many HNIs are seeking assistance with diversification (51%), personalized asset allocation (38%), and goal planning (32%). This indicates a shift towards a more structured and intentional approach to wealth management.
To overcome these challenges, HNIs need to adopt a more disciplined and strategic approach to saving and investing. This includes setting clear financial goals, creating a comprehensive financial plan, and diversifying their portfolios across asset classes and geographies. Seeking guidance from qualified financial advisors can help HNIs navigate the complexities of wealth management, optimize their asset allocation, and achieve their financial aspirations. Embracing technology and digital wealth management platforms can also enhance efficiency and transparency in managing their portfolios.
