Legacy Planning by the HNIs

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In the wealth management sector, estate planning is one of the fastest expanding service products. An increase in the number of HNI clients in India is driving the growth. 

According to industry forecasts, India’s HNI population is predicted to increase by 60-70 percent in the next five years. However, there is a shift in consumer behavior in addition to the growth in numbers. Let’s take a look at some of the current developments in the estate planning sector.

Begin early

One of the major changes is that investors are seeking estate planning services earlier in their lives. Customers are planning their asset transfer in their early 40s, rather than waiting until they are in their 60s.

Many customers have begun to plan for their legacy as a result of life’s uncertainties. While the pandemic may have prompted this shift, many clients have become more conscious of the importance of legacy planning as a result.

Inclusive decision-making

While the male member is still the signatory to the will, the choice about who receives what is made with the active participation of the spouse. 

Younger HNI women are also exerting their viewpoints more equitably in the family’s wealth decisions. They are quickly establishing themselves as major decision-makers.

When it comes to portfolio management decisions, the next generation of investors is enlisting the help of their children. They are enlisting the help of their college-aged children in financial discussions with their counselors and wealth managers. 

Regulatory risk avoidance

Most investors, contrary to popular assumptions, do not wish to assume any regulatory risks. They like to be on the right side of the law, particularly when it comes to overseas investment.

 Investors seek to avoid investing in tax havens because the government has been highly vigilant in monitoring foreign money flows. 

Because wealth planning entails a substantial amount of tax planning, investors prefer to choose simpler ownership arrangements that make it easier to declare tax liabilities and escape tax agency scrutiny.

Prioritizing risk reduction over profit maximization

Affluent investors have realized the value of risk management and thus asset allocation when it comes to investment decisions. Most investors devote a significant amount of time to learning about the dangers associated with each investment. 

They are looking for investments that would allow them to keep their money safe. Alternative funds, unlisted stocks, and structured products are among the alpha-generating options they pursue.

Offshore family office

Many investors prefer to invest and consolidate their riches in offshore locations. They have children who are either studying or living abroad, therefore they choose to keep their money in accounts denominated in US dollars to avoid the rupee’s impact. 

Singapore’s supply of Variable Capital Companies is luring many worldwide HNIs to establish family offices there.

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