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What keeps your wealthy clients awake at night?

Fear of losing money and absence of succession planning are giving 2.84 lakh HNIs and Ultra HNIs sleepless nights, shows the recent IIFL Wealth and Wealth X report titled IIFL Wealth Index 2018.

The report said, “The domestic and geopolitical backdrop aside, what is the number-one fear of the wealthy? It is quite simply losing their fortunes, so wealth preservation is paramount. Despite a burgeoning confidence in their ability to make money, two fifths of those surveyed said they were worried about losing their wealth. This was a particular concern for women, HNIs and those whose wealth is tied up in property. However, for those whose wealth was made through the sale of their business, it was less of a worry because they have already cashed in and feel less exposed to the prevailing risks of the business environment that could affect a single company or industry.”

After losing their money, the next most significant worry is about succession. One fifth of the survey of India’s most wealthy said succession planning was their next biggest headache. The richer the respondents, the more likely they were to set a succession plan in place, indeed, found the report. The report found that one in five HNIs has no succession plan in place.

While there is no doubt that HNIs and ultra HNIs are brilliant at making money and are cash rich, these people have no time managing wealth and hence require advisors to help them preserve wealth. Among Indian wealthy, women and individual under 55 are more likely to work with advisors.

The understanding of these wealthy individuals is modest when it comes to financial assets. However, the best-understood asset class is equities, with 42% claiming to have either very good knowledge or professional expertise.

The report shows that even wealthy do not understand complex products such as PMS and AIFs. The report shows that less than 18% have a grasp of structured products or private equity.

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