Private bankers ride the swell in the ranks of the wealthy

People earning more than  ₹2 crore annually have doubled from 100 executives in 2022 to around 200 as on date, the data from Native shows. . (iStockphoto)
People earning more than ₹2 crore annually have doubled from 100 executives in 2022 to around 200 as on date, the data from Native shows. . (iStockphoto)

Summary

  • Private bankers are ballooning in headcount, and their salaries, too, are skyrocketing as demand shoots through the roof and they jump jobs as well

There never has been a better time than now to manage the wealth of the rich, as the parabolic rally in equities in the post-pandemic era swelled the ranks and bank balances of the extreme rich in both metros and tier-II cities.

Private bankers, whose job it is to manage the finances of such wealthy individuals, are ballooning in headcount, and their salaries, too, are skyrocketing as demand shoots through the roof and they jump jobs as well.

The number of private bankers in the wealth management industry has almost doubled in the past two-three years, data compiled by Native, a homegrown headhunting firm, shows. Today, there are around 3,200 private bankers in India across metro, tier-I and tier-II cities, compared to just around 2,000 bankers two years ago, the data compiled exclusively for Mint shows.

Their compensations, too, have kept pace. Those earning more than ₹2 crore annually have doubled from 100 executives in 2022 to around 200 as on date, the data from Native shows.

Similarly, the number of people earning more than ₹1 crore in annual compensation has doubled from around 250 people in 2022 to 500 as on date. This effectively means every one in five private bankers earns more than ₹1 crore in annual salary today.

“Esops have long been a crucial factor in attracting private bankers. Following the successful listings of firms like 360 One WAM, Nuvama, and Anand Rathi, they have become a key determinant in talent acquisition, particularly for senior-level positions," said Shujat Ali, director of private banking practice at Native.

The wealth management surge

Post-covid, the surge in capital markets has coincided with the growth of the wealth management industry, of which private bankers are a part. Even as the Nifty has grown more than 206% till date from the panic low of March 2020, the wealth management industry in India has grown at an annual compounded rate of around 18-20% over the same period.

Today, the industry’s assets under management (AUM) stands at more than $750 billion, according to new reports. It is projected to climb to more than $2 trillion over the next decade, thus becoming the fastest growing segment in the financial services industry.

Also read | Standard Chartered Bank looks to raise its wealth management game in India

“The next decade is going to be a golden era for the wealth management industry, where a significant amount of wealth creation will happen across all segments of the society, from retail clients to the ultra HNI clients," said Raghav Gupta, joint CEO of IIFL Capital.

Gupta added that the wealth management industry is likely to grow exponentially driven by the addition of high-net-worth individuals (HNIs). “The annual likely growth is minimum 20% over the next decade," he said.

The rise and rise of the ultra-rich

According to the Hurun India Rich List 2024, India saw one new billionaire every five days in the past year, as reported by Mint last August. “India is emerging as Asia’s wealth creation engine," Anas Rahman Junaid, founder and chief researcher at Hurun India, said. “While China saw a 25% decline in its number of billionaires, India experienced a 29% increase, reaching a record 334 billionaires." The cumulative wealth of these billionaires is an eye-popping ₹159 trillion.

To capitalize on the rising number of ultra-high-net-worth individuals (UHNIs) and HNIs, several new wealth management startups have come up in the past 12-24 months. Some of these include Centricity Wealthtech, Dezerv, Neo Group, Ionic Wealth, FundsIndia, HDFC Tru and Shriram Wealth, among others. As per various classifications, HNIs are those with liquid assets of up to ₹5 crore, and UHNIs, more than ₹25 crore.

Also read | HNIs pivot towards early-stage startups as late-stage entities face correction

According to Sandeep Jethwani, co-founder of Dezerv, the wealth management ecosystem in India is witnessing a profound change, with new wealth creators, particularly first-generation entrepreneurs and professionals, entering the high-net-worth segment at an unprecedented pace.

“Our data shows nearly 1 crore (10 million) households now have investible assets over ₹1 crore, growing at 15% CAGR annually," Jethwani said. “However, the talent pool to serve this segment isn’t growing at the same pace. There’s a clear demand-supply gap playing out and one that cannot be solved at the expense of client experience."

Jethwani added that his firm has hired more than 100 relationship managers in the past 24 months who are managing ₹10,000 crore in client assets.

Going strong

Native’s Ali, too, said that the private banking industry continues to experience strong demand for private bankers, team leaders, and CXO-level executives. “At Native, we are currently managing several CXO-level positions and conducting more than a dozen searches for candidates at the regional head-equivalent level on behalf of our clients," Ali added.

The high demand for deep domain expertise has seen several top-level moves in the wealth management industry in recent times.

Some such moves include Raghav Gupta’s and Prakash Bulusu’s appointment at IIFL Capital as joint CEOs; Anupam Guha’s appointment as chairman at Motilal Oswal Private Wealth; Apurva Sahijwani’s appointment at Avendus Wealth as managing director and CEO; Srikanth Subramanian’s move to Angel One Wealth as its cofounder and CEO; and Srinivas Mendu taking over as CEO of FundsIndia.

Also read | Can this mid-cap company take lead in the $1.2 tn wealth management business?

Many of their team members also move with these CEOs, with compensation and the culture becoming the top reasons for people movement in the industry, the Voice of the Private Banker 2025 report by Native shows. And since the compensations are linked to the growing AUM, bankers expect compensations to be directly linked with advisory fee-based earnings going forward.

 

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