S2NRI

Thousands of NRIs shift to various countries every year. In the United States alone, more than one million visa applications from Indians are processed. Despite immigration, many non-residents of India (NRIs) are there who have income sourced in India. Even, many of them go there with a dream to come back here again after retirement. So, continue to lookout for the best opportunities, especially the investment plans in India. This is a vital step for managing their finances, no matter where you go and live.

This well management is called wealth management for NRIs. Here in this blog, we bring a few important tips for non-residents to manage their wealth.

• Convert Bank Account into NRO Account

This is a very first step that non-residents should work on. There may be many accounts, such as saving bank account, Demat account, etc., in their name in India. Since they are no more a normal citizen, they have to convert all these accounts into NRI accounts. Here, an NRO (Non-Residential Ordinary), Foreign Currency Non-Resident (FCNR), or NRE (Non-Residential External) account can help. NRIs must have this account, especially if they have income from any source in India. It will combine their accounts. And hence, managing them all become easy. Also, these accounts help in earning foreign currency and repatriate funds easily. Another option is opening a PIS account. It expands for Portfolio Investment Scheme account that can help in easing trading. Simply put, Indians can buy and sell their shares on some recognized stock exchanges here.

• Regularly Review and Rebalance

Markets and economic conditions are ever-evolving. You should regularly review your PIS to ensure that it resonates with your risk tolerance and financial goals. Monitoring the performance of your investments is necessary. For this, you need to discover market trends, economic indicators, and global events that could actually impact your portfolio. This will help you to make adjustments to resonate them with your financial goals. If anything seems troublesome, you can sell or buy to rebalance your portfolio over time. This activity maintains the desired asset allocation.

• Discover Investment Plans and Choose the Best One

India is a developing economy where equity is growing rapidly. This is why the debt return in the country is higher than those of developed countries. This is why selecting the best investment plan in India can help non-residents to make more money through investing in mutual funds and equity shares. But before investing in shares, read the guidelines specifically from RBI thoroughly.  Apart from this investment, they can purchase any residential or commercial properties in India. This alternative brings a few tax implications. They should strictly take care of these implications when they are likely to sell any property. Otherwise, the tax implication and ownership rights can adversely affect your investments. You may consult legal experts for a smooth real estate transactions.

• Optimize Currency Exchange

Non-residents can also make benefits out of currency exchange rates. Certainly, these rates can impact ROIs. Timely and strategically exchanging currency can soar investment gains. To make it achievable, you can utilize the services of foreign exchange experts. Those professionals can assist you in optimizing these transactions. You should also stay informed about foreign exchange regulations and limits that are concerned with NRIs. Ignoring these updates can lead to compromising your investments and repatriations effectively.

• Invest in Health Insurance

Having a health cover is essential. This can help in coping up with the rising healthcare costs. Non-residents should also have health insurance. Having pre-existing diseases may not make it easy to acquire a plan. So, it’s good to invest in a plan before for overcoming expenses associated with potential diseases. This initiative will help you to sail across uncertain medical expenses.

• Discover Tax Liabilities

Capital income from India is taxable in India. However, India has a Double Tax Avoidance Agreement (DTAA) with many countries. This can help in avoiding tax if one has the same income twice. This agreement allows you to set off taxes that have been paid in one country, but are due in another country. The DTAA agreement brings peace of mind, as it can help non-residents to pay less tax rates in India. In order to leverage DTAA, you can fill the Form 10F. In addition, you should have a tax residency certificate from the country of your residence.

• Seek Professional Guidance

Wealth management for anyone, including non-residents, can be like chewing iron bullets.  It involves complex legal, financial, and tax considerations. Consult with financial advisors, tax consultants, and legal experts who specialize in cross-border wealth management. Their insights can help you make informed decisions.

These tips can help non-residents to not only manage their wealth, but also make profit and prosperous life after retirement.

Conclusion

NRIs should focus on diversifying their investments across various asset classes to manage risk effectively. They should prioritize building a well-structured financial plan that aligns with long-term goals. Utilizing NRI-specific investment options and tax benefits can help while keeping them informed about changing regulations. Regularly review and adjust the portfolio to maintain alignment with evolving financial objectives and market conditions. Seeking professional advice from financial experts with expertise in both India and the resident country’s financial systems is crucial for a comprehensive wealth management strategy.

Wealth management is a practice of strategic planning. Oftentimes, it involves professional guidance to manage and grow one’s financial assets consistently and effectively. In case of NRIs (Non-Resident Indians), managing wealth becomes crucial. They often have property and capital income that require specific considerations. Their unique financial circumstances make it necessary to hire an expert wealth management consultant like S2NRI.  With this support, they can save and consistently grow their income.

Tips for Wealth Management of NRIs

Let’s catch up with some tips and options for NRIs to manage their wealth:

1. Set Clear Financial Goals

Setting a clear financial goal should be at your forefront. For this, define your financial objectives, which can be related to long-term wealth accumulation, retirement planning, or education funding for children. With such a transparent outlook, it will be quicker and easier to derive your wealth management strategy.

2. Understand Tax Implications

This is an inescapable part. Indian emigrants should be aware of tax laws and regulations in both, your home country and the country of residence. They should establish contacts with solicitors or matter experts to get assistance in optimizing tax planning and minimizing tax liabilities.

3. Diversify Your Investments

Many NRIs have millions of currency that they are willing to invest and multiply. For the wealth management, it’s better to invest across various asset classes. These classes can be stocks, bonds, real estate, and mutual funds. Choose different classes because this way does not bring along the risk. And, it also ensures that their wealth is not overly invested in just a class, which is considered a single investment.

4. Explore NRI-Specific Investment Opportunities

NRIs have specific investment options tailored to their needs, such as NRI fixed deposits, NRI mutual funds, or NRI-specific real estate investment schemes. These options often offer tax benefits and higher returns.

5. Consider Retirement Planning

There are multiple plans offered for retirement by various companies. Plan for a secure retirement plan by investing in products like National Pension Scheme (NPS) or pension plans. Before finalizing, understand the rules and regulations related to pension schemes in both, your home country and the country of residence. Then, say yes to any scheme.

6. Monitor Exchange Rates

This is what you cannot neglect. Exchange rates belong to the conversion rate of the currency, which continues to go up and down. Fluctuating exchange rates certainly impact the value of your wealth. So, it’s suggested to stay up-to-date with the exchange rates. Prefer hedging strategies (risk limiting plans) to minimize currency risks.

7. Consult with Financial Advisors

For serious investors, it’s excellent if they hire a financial advisor. For this, engaging with experienced wealth management professionals who understand the specific financial needs can be fruitful. They understand challenges faced by NRIs. So, it won’t be an uphill battle for them to personalize guidance and tailor investment strategies in accordance with your circumstances.

8. Estate Planning

This is specifically in the context of real-estate or property management of non-residents. Under the guidance of a consultant, they can develop an estate plan. This will help in a seamless transfer of your wealth to your beneficiaries. The consultant should be in the know of inheritance laws in your home country. You should establish trusts or wills to protect your assets in the end.

9. Maintain Adequate Insurance Coverage

Having a cover is important because it can protect your wealth. For this, you need to measure your insurance needs, which could include life insurance, health insurance, and property insurance. Then, take a suitable plan for covering your wealth.

10. Stay Updated on Financial Regulations

Finance-based regulations, tax laws, and related compliance continue to change in any country. Keep yourself informed about any changes in them. Stay tuned with financial regulations to avoid legal issues, litigation, and penalties.

11. Regularly Review and Refine Your Portfolio

Over time, you need to examine your investment portfolio and make necessary adjustments. These changes should be based on changing market conditions, financial goals, and risk tolerance. Redefine them to maintain the asset allocation that you have dreamt of, and aligns with your evolving wealth management strategy.

12. Leverage Technology and Online Platforms

This is the most advantageous information. You need to leverage online wealth management platforms. These are just a click away if you search over the internet and get ready to offer quick access to financial information, investment tools, and portfolio tracking. Above that, these platforms offer transparency and enable you to monitor and manage your wealth efficiently.

Wealth Management

With Adani and Ambanis, now more Indians are joining the millionaires club. It also necessitates wealth management, which is steadily trending in India. What earnings, revenues, and savings people possess, they want to effectively manage them. This is where wealth management emerges in a key role.

It is actually pieces of advice or assistance to NRIs, investors, or interested people who want their wealth or finances to be managed by professionals. With these wealth management services, people hope for growth and legitimate safety of their funds or assets.

Mature Investors

Nearly 80% of households are likely to be middle income groups by 2030, which is way more than 50% in 2019. If you consider the net worth individual population, it is likely to be 75% up in 2025, which is 6.11 lakhs.

These statistics show the maturity of the Indian economy, where investors are more logical thinkers and focused.  They need worthy advice to park their hard-earned money in a safe alternative that can ensure consistent returns or income over time.

Here are the top trends that can help in managing their wealth properly.

Top Trends of Wealth Management that Will Rule in 2022

Because of digital innovations, the transformation is seen in wealth management firms. They are now closer to grabbing n number of opportunities.

Here are the top trending wealth management practices in India that you should follow.

• Digital Connectivity

The new approach of preferring digital-first is in these days. The new generation of Gen Z and millennial investors expect digital connections. This is simply because of the seamless and 24/7 engagement. They can chat, talk, or call on face time, WhatsApp or Zoom with financial advisors. Above that, these talks take place in real time, which ensures accessibility to portfolio data and investment possibilities. Now, establishing a relationship and building the loyalty of people of these demographics are easier. They can come across the need for tailored solutions, which can be provided accordingly.

• Hybrid Wealth Management

Hybrid stands for the mix of legacy and modern systems. The significance of human connections or personal relationships is a legacy. And, the power of modern digital solutions, such as AI tools or applications and self-service investment applications can never be neglected. By blending this physical connectivity with seamless digital experience, wealth managers are consistently maintaining empathy, transparency, convenience, and faster experiences.  Digital tools and automated processes have scaled productivity and sped up the response rate.

• Alternative Asset Classes Are Popular

NRIs and investors are now searching for non-traditional investment opportunities. They can be passive investment options, equity buying of unlisted companies, private equity investing, non-fungible tokens (NFTs), carbon credits, etc. Moreover, people are now more interested in investing in ESG funds. This is simply because young investors are more concerned about social and environmental factors. They are active and agile while looking for investment opportunities that can provide true value.

• Strict Regulatory Laws for Advisors

The apex regulator in India called the Securities and Exchange Board (SEBI) is now closely monitoring and regulating wealth these days. They are also focusing on the advisory fee models, data security, and privacy practices that these firms follow. The introduction of Artificial Intelligence (AI) /Machine Learning (ML), cryptocurrencies, and ESG funds has pushed an alarm because they can easily attract scams. Besides, taxes are skyrocketing. So, advisory firms require proactive solutions, regulations, policies, and strenuous compliance to ensure security.

• Smartly Save

India is where people believe in saving. Around  95% of India’s household wealth has been in the form of real estate, gold, jewelry, and fund savings. They are aware of the fact that an overly deposited wealth in non-financial assets can cost loss at the time of inflation. This is why they prefer a balanced approach. They invest in where they predict better returns from the liquidity of that asset. So, this legacy approach will be trending as always.

• Holistic Financial Plans

The advanced generation of investors is firmer and more ethical also. They know what they expect in life and how to achieve it. Simply put, they find more holistic investment alternatives, which can support their life and also help in welfare. This is why CSR investment, investment in retirement plans, estate planning, and social welfare investment would be a big trend this year.

• Personalised Experience

Investors are no longer happy with solutions that offer one-size-fits-all. They want more bespoke and relevant offerings that they decide in accordance with their needs. It is applicable to all types of investment options, marketing emails, and customer support. They want customized solutions, which can be recognised through a personalised experience. So, it’ll be trending this year.