What are the next generation of HNI gearing up for - Kotak Bank
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India is named amongst the few rapidly growing economies of the world. The country creates a record-breaking number of millionaires every year, which is much more compared to many western countries. The country registers a 6% annual growth of high net worth individuals (HNI), which is expected to grow seven fold in the next 15 years.

A country where 28% of its population comes under the youth bracket within the age group of 20-35 years, a digital revolution in the banking sector was inevitable. Of these Indian youth, almost 27% are self employed businessmen and another 30% inherit wealth from their forefathers. With the emergence of this new high net worth generation, the banking sector has shifted its focus towards a goal based framework.

Difference of Approach from Previous Generations

Today's new generation, Gen Y, as it is popularly known, constitutes almost 30 to 40% of a bank's market share. This new group of individuals is highly tech-savvy, well informed and qualified. They have the capability to take high risks and at the same time demand quicker returns.

As compared to the traditional investors, their approach towards investment is more clear and dynamic. This group of investors usually believes in more of present spending and less amount of future saving. They have high technical knowledge while the previous generations had high financial knowledge. Being financial novices, they expect a wealth manager to give more simplistic and concise data.

It is well known that the current generation is spoilt with the availability of numerous choices, so are the Gen Y investors. They are more open to a diversified portfolio, seeking new products which allow them to have a sophisticated asset allocation. Innovative and clever strategies describe today’s young wealth investors where higher alpha and cheap beta strategies are well-known. One may see a portfolio with a mix of stocks and bonds based products along with a smaller portion of wealth invested in hedge funds and private equity.

Varied needs of the new Generation

The next generation of HNI customers are bold but want quicker returns as compared to the previous generation. The wealth managers should be mindful of this, so when you hire a wealth manager, make sure he understands your needs.

The new age entrepreneurial millionaires have very different needs from what a wealth manager has been providing since olden times. If your needs are different, so should be your wealth managers. Here are some of the things they look for in a wealth manager:

  • Need for real time on-demand clear reporting is one of the major selection factor for a wealth manager.

  • A clear thought process, better presentation skills along with timely and accurate data are the basic needs of this digital generation. They believe in constantly seeking diversified products, and monitoring and managing the performance of the same.

  • This set of new millionaires are not only well educated but also well connected. They consult their peers and media to analyze a wealth manager's reports. Word of mouth and recommendations also play a huge role in today's investment markets. They are more socially aware and like to be associated with familiar and ethical brands when it comes to investing or selecting a wealth manager.

  • All in all, digital capability of an investor when matched with the digital engagement provided by an advisor, ensures a long term association between the investor and the advisor. A wealth manager, along with accurate performance, has to build a strong digital architecture to lure investors. Online services, social investing, smartphone banking apps, 24x7 availability are some of the key factors.

  • Along with this, customization is the key to managing a large set of investors for long term. With the latest financial crashes and high volatility in the market, a lot of distrust can be sensed within the investors. Customized goal oriented relationship building activities play a key role in minimizing this negative sentiment prevailing in the industry.

To satisfy this newly generated digital need, a bank needs to adopt quickly to the new market demands. It is not only important to provide sophisticated digital services in wealth management, but introduction of various technologically advanced digital tools which enable one to create better presentation and generate accurate goal oriented representation of an investor's current portfolio position is also very important.

With the digital banking industry growing fast, a sudden demand for digital Registered Investment Advisors (RIAs) has come into the picture. Services like virtual investment portfolios, investment learning tutorials for early investors, algorithmic trading solutions are some of the latest banking services an investor looks forward to in a bank.

All wealth managers are currently facing new product development and better marketing strategy challenges. You, as the new age millionaire, not only possess the power to increase a bank's scale of operations but also change entirely the future of how the banking sector would function.

However, channelizing your efforts into searching for a suitable wealth manager who would optimize your investment experience may become a rather tedious task. Seeking accurate pricing and performance information while keeping an eye on the market situation and future trends may take all your time which you would rather invest in increasing your wealth further. So all you need to do is concentrate on your empire and leave the rest for experts who have their best interest in your growth.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.