Edelweiss Personal Wealth Advisory (EPWA), the wealth management and broking arm of Edelweiss Group, expectsa ‘sharp growth’ in business from Tier III and Tier IV towns.

The rise in financial affluence in these towns, and the emerging trend to invest in assets other than real estate and gold, would contribute to this growth, said Rahul Jain, Head – Personal Wealth Advisory, Edelweiss.

“Tier III and Tier IV towns currently account for nearly 20 per cent of our total business. We have seen good growth from these cities; we expect it to contribute nearly 35-40 per cent of our business in the next three-to-four years,” Jain told BusinessLine .

The total assets under advice (which is typically a measure of the total assets for which an institution provides administrative services) of the company’s wealth management business grew by 49 per cent to ₹90,100 crore during FY18, compared to ₹60,300 crore in FY17. The company’s clients include ultra high networth, high networth and mass affluent segments.

EPWA has a total of 70 branches, and of these, nearly 62 are in Tier II and Tier III towns.

According to him, digitisation has changed the dynamics of financial services, even in the smaller towns. Moving forward, there would be no need to set up shops to tap into these markets.

“In the next 6-12 months we should have solutions and then there is no reason why financial services cannot grow the way e-commerce has grown in these areas,” he said.

Growing market

The Indian wealth management market, pegged at close to $250 billion in 2018, is estimated to grow to $1 trillion by 2025.

The improving GDP numbers, rising disposable incomes and financialisation of assets, will contribute to the growth in the wealth management market in India.

“The country’s GDP is expected to grow from $2.5 trillion to $5 trillion by 2025. So, people will have more investible surplus and will look to investment avenues other than real estate and gold. The opportunity for growth is immense,” he said.

Edelweiss’ wealth management business has been growing at over 35 per cent in the last couple of years. A good part of this growth comes from millennials (investors typically in the age bracket of 25-35 years), he added.