Competition has intensified in the wealth management space with the surge of affluent people in the country-India has 870,000 dollar millionaire households,up 90% from 460,000 lakh in 2021,according to the mercedes-Benz Hurun India Wealth Report 2025.This resulted in all wealth managers fighting for the same target clients, each vying to attract high and ultra high net worth individuals by offering tailored advisory services and thorough wealth solutions.
India’s wealth-management assets are estimated to grow at a pace of 12%-14% annually through FY27 to ₹47 trillion from ₹33.3 trillion in FY24, according to a March report by CRISIL and Jainam Broking.
The net income margins of the leading players in the 360 ONE’s margins have slipped from 33.3% in FY23 to 30.8% in FY25, while Nuvama Wealth, a relatively new player, has seen its margin moderate to 23.7% from a high of 48.3% in fiscal 2022.
“competition is helping investors to benefit from reduced costs that leads to margins seeing some suppression at the wealth manager’s end,” saeid Vinay Ahuja, co-CEO, 360 ONE Wealth. “This trend could continue for a while”.
Net income margins showed mixed trends across listed wealth managers in Q2 of this fiscal year. 360 ONE saw margins fall to 28.3% in Q2 2026 from 28.62% a year earlier. Anand Rathi Wealth improved to 33.41% from 31.39%. Nuvama Wealth also declined to 22.4% versus 24.51%, though still above its Q2 FY2024 level.
Regulatory changes haven’t helped. The introduction of total expense ratio, or TER, slabs in 2018 by markets regulator Securities and Exchange Board of India (Sebi) and a proposed revamp of these slabs to cut investor costs this year is expected to hurt the industry.
The effect of the recent proposal for revamping TER would be about ₹20-25 crore on revenue annually on his company, said ashish Kehair, managing director and CEO of Nuvama Wealth Management on an earning call after the September quarter earnings.A peer said the way out was through more efficient operations. “The TER changes may led to a 5-10% drop in revenue, but will be countered by productivity,” said Ankur punj, managing director-national head at Equirus Wealth.
doubling down on customer relationships
To deal with the rising competition and regulatory changes, wealth managers are pushing to expand business by aggressively hiring relationship managers (RMs) who would help onboard more clients and expand into tier-II and III cities while also making their own products.
At 360 ONE, this is reflected in the payroll. Employee costs at the Mumbai firm jumped to ₹285 crore in Q2 FY26, an 80% jump from the same quart
India’s Wealth Management sector: Expansion, investment, and Margin Pressures
The Indian wealth management industry is undergoing a period of significant transformation, marked by expansion into smaller cities, increased investment in technology and proprietary products, and ongoing pressure on profit margins. Wealth managers are adapting to a changing landscape driven by a growing affluent population and increasing investor sophistication.
Expansion Beyond Metros & Focus on Tier 2/3 Cities
Wealth platforms are strategically extending their reach beyond major metropolitan areas, focusing on Tier 2 and Tier 3 cities where affluent households are expanding at a faster rate. These cities often favor a hybrid advisory model, blending digital platforms with personalized, curated financial products. According to Equirus Wealth’s Pankaj Punj, “Tier II,III, and IV cities are going to be the drivers of the wealth industry.” This expansion is fueled by the observation that investors in smaller cities demonstrate greater commitment to long-term investment strategies, with a higher proportion of systematic Investment Plans (SIPs) held for five years or more compared to Tier 1 cities.1
This trend is significant as over 40% of India’s ultra-high net worth individuals (UHNWIs) reside in non-metro cities, with their wealth currently managed largely by autonomous financial advisors and chartered accountants.2 Firms like Ionic Wealth and Equirus Wealth are actively targeting this demographic, seeking to capture a larger share of this growing market.
Investment in Proprietary Products & Technology
To maintain profitability and differentiate themselves, wealth managers are increasingly developing their own financial products. This move allows them to capture a larger portion of the value chain and offer bespoke solutions tailored to client needs. Recent examples include Nuvama Wealth Management and ASK Asset & Wealth Management Group, both of which received regulatory approval this year to launch their own mutual fund businesses.3 Punj of Equirus Wealth notes that creating proprietary products provides a competitive edge.
This push for product growth is accompanied by substantial investment in technology and infrastructure. Though, these investments are impacting cost-to-income ratios. 360 ONE’s cost-to-income ratio rose to 49.2% in the past year, up from 48.4%. Nuvama currently has the highest ratio among listed firms, at 57% in Q2 FY26, even though this represents an improvement from 53% the previous year.3 Cost-to-income ratio (CIR) measures operating expenses as a percentage of operating income, indicating a company’s operational efficiency.
Margin Pressures & Competitive Landscape
Despite growth opportunities, wealth managers face ongoing pressure on margins as investors increasingly seek lower-cost investment alternatives. The industry is also experiencing a surge in hiring for Relationship Managers (RMs), a trend that is expected to strain short-term profitability as it takes time to fully materialize.
Prayesh Jain, an analyst at Motilal Oswal Financial Services, anticipates continued competitive intensity. “Competition will get higher in the future and will not recede in the near term. We are still some time away from relief,” he stated.3 While a significant increase in investment flows driven by positive market performance could possibly offset margin compression, Jain believes the industry is not yet at that point.
Sources:
- https://www.livemint.com/money/personal-finance/india-wealth-management-industry-sees-rise-in-investments-and-competition-11704544199944.html
- https://www.crisil.com/en/news/press-releases/india-wealth-management-aum-to-grow-at-15-20-over-fy24-fy26-crisil-jainam-report/
- [https://www.business-standard.com/finance/news/wealth-managers-invest-in-products-tech-to-boost-margins-124010800061.html](https://www.business-standard.com/finance/news/wealth-managers-invest-in-products-tech-to-boost-margins