94% of affluent people in India set new life goals after pandemic: Survey

According to the Wealth Expectancy Report 2021, Covid-19 has prompted affluent in India to become more future-focused while resetting their priorities: nearly half (42%) have taken ‘to improve their health’ target has been set. 39% of those who set the goal to be ‘financially prepared for big life changes (having a child/moving abroad)’ and 37% to ‘set aside more for a child’s future (education or financial aid)’.

To meet these new goals, affluent people need new strategies to increase their wealth, which often involve more active investing rather than saving cash. However, their existing ‘confidence gap’ has made many risk averse, potentially preventing them from investing or putting their money to work using digital tools that simplify wealth management.

Confidence gap: Emerging affluent people have suffered a disproportionate loss of confidence, with half (50%) reporting low confidence compared to 41% of high net worth (HNW) individuals. This means that those people down the spectrum of wealth, still setting up their finances, may suffer more if they do not have the support to rebuild their confidence.

According to the survey, for the rich in India, the three most common barriers to achieving their financial goals were ‘volatility in financial markets’ (30%), ‘inadequate knowledge of specific investment opportunities’ (28%) and ‘investment practical difficulties in shifting strategies’ (28%).

Retirement is at risk: The late start of retirement planning, coupled with the pandemic-induced confidence gap, leaves a significant proportion of affluent consumers at risk of shortfalls for their retirement. The survey found that 33% of respondents who have not yet retired have not started saving for retirement, yet 43% of the affluent in India estimate retirement based on investment income. At the same time, 54 percent have planned to retire before the age of 65 and in the last 18 months, 20 percent have set a new financial target to retire early. According to the survey, it shows a disconnect between current actions and future expectations, if a confidence gap is preventing them from investing.

A proactive approach: Globally, nearly all (94%) investors who had tried more than five new investment or investment strategies reported being happy with their finances. Whether it’s diversifying into new asset classes, new investment strategies to rebalance their portfolios, or searching for sustainable investments, the survey revealed that more pragmatic investors are happier with their finances. 27% of investors said they ‘followed new strategies to get the most out of the stock market (eg short-term trading)’, followed by ‘investing in private markets (eg private equity, private debt)’ (27%).

According to the survey, in India, almost all (99%) who have taken five or more actions related to their finances in the past year are happy with their investment portfolio.