Despite substantial incomes, a significant number of High Net Worth Individuals (HNIs) in India are struggling to meet their financial goals, particularly concerning retirement planning and their children's education. A recent survey by Marcellus Investment Managers and Dun & Bradstreet, titled the "India Wealth Survey 2025," has shed light on this paradox, revealing a gap between the aspirations and the financial realities of many affluent Indians.
The survey, which included 465 households across 28 cities with post-tax incomes exceeding ₹20 lakh, found that a considerable percentage of HNIs are not saving enough. Specifically, 43% of those surveyed save less than 20% of their post-tax income. This is particularly alarming, considering that many HNIs aspire to early retirement, entrepreneurship, and securing foreign education for their children.
Several factors contribute to this challenge. One significant issue is the tendency among HNIs to allocate a large portion of their wealth to real estate. The survey indicated that more than half of the respondents have over 20% of their assets in property, excluding their primary residence. While real estate is often seen as a safe investment, over-allocation to this asset class can lead to illiquidity and lower overall portfolio returns. In contrast, only about a third of the respondents had more than 20% of their investments in equities.
Another factor is the lack of financial discipline and structured planning. Many HNIs lack a clear financial roadmap, leading to inefficient and tax-ineffective portfolios. This is compounded by a tendency towards high spending and a preference for luxury purchases, which can limit their ability to reinvest and preserve capital. As Saurabh Mukherjea, Co-Founder of Marcellus Investment Managers, noted, affluent Indians often live in a world of high aspirations and low savings.
Furthermore, a considerable number of HNIs carry a high debt burden. The survey revealed that nearly half of the respondents aged 30-45 have active loans. This debt, combined with expenses such as children's education and EMIs, can significantly impede their ability to save for long-term goals. Compounding the issue, 14% of those surveyed do not maintain an emergency fund, leaving them vulnerable to unforeseen financial setbacks.
There's also a perceived lack of understanding regarding investment options. Many HNIs are not comfortable investing in equities, with 30% of respondents expressing reservations. Global diversification is also limited, with nearly a quarter of respondents unfamiliar with the concept of investing overseas, even though 21% have started to do so. This lack of diversification and understanding can lead to suboptimal investment decisions and lower returns.
Despite these challenges, the survey indicates a growing awareness among HNIs about the importance of financial planning. A significant 82% believe that professional financial planning can improve their chances of achieving long-term financial goals. However, a substantial portion of HNIs are dissatisfied with the financial advice they currently receive. Two-thirds of respondents expressed dissatisfaction, citing a lack of personalization and potential conflicts of interest among wealth advisors, chartered accountants, and bank relationship managers. This highlights a need for more transparent and tailored advisory services.
In conclusion, while HNIs in India possess high incomes, many struggle with achieving their financial goals due to a combination of factors, including insufficient savings, over-investment in real estate, high debt, lack of financial discipline, and inadequate investment knowledge. The survey underscores the critical need for improved financial literacy, diversified investment strategies, and access to trustworthy and personalized financial advice to help India's wealthy secure their financial futures and achieve their aspirations for retirement and their children's education.
