Is high-net-worth investing getting democratised? Experts discuss

 India’s wealth management industry is expanding beyond traditional mutual funds, with Specialised Investment Funds (SIFs) and Portfolio Management Services (PMS) offering investors more choices. However, high investment thresholds, onboarding hurdles, and gaps in financial literacy remain challenges to making specialised investment products more accessible.

At the Business Standard BFSI Insight Summit 2026, a panel discussion titled 'Is high-net-worth investing getting democratised?', explored how these products are evolving, the opportunities they offer, and the challenges that could limit their reach.

In conversation with Business Standard’s Khushboo Tiwari, Bhavesh Jain, President and Co-Head of Factor Investing at Edelweiss Mutual Fund; Gaurav Mehta, Head of SIF (Equity) at SBI Mutual Fund; and Vikas Khemani, Founder of Carnelian Asset Management & Advisors, discussed the future of specialised investing in India.

Khemani said the emergence of new investment categories reflects rising prosperity and changing investor needs rather than competition between products.

“Every time prosperity of the country increases, the heterogeneity of investors increases, and the needs of investors increase,” he said, adding that evolving product categories are necessary to prevent the market from stagnating.

He cited the growth of Alternative Investment Funds (AIFs) as an example of how new categories can create opportunities without necessarily taking away from existing ones. As wealth grows, investors are likely to diversify across mutual funds, PMS, private equity, and other alternatives.

Mehta said SIFs had recorded strong initial growth despite being a relatively new category. After roughly a year, industry assets had reached around ₹36,000–37,000 crore, with more than 150,000 investor folios.

Although these figures remain small compared with the broader mutual fund industry, he said SIFs address an important gap by offering different risk-return profiles and diversification opportunities.

SIFs offer equity, fixed-income, and hybrid strategies, allowing fund managers to use derivatives more flexibly than conventional mutual funds.

Jain said these strategies could complement existing products by offering alternative ways to generate returns. For instance, an equity long-short strategy can use derivatives alongside stock selection to seek returns above a benchmark.

Discussing performance, Jain said Edelweiss Mutual Fund’s Altiva Hybrid Long Short Fund had delivered a one-year return of around 9.5 per cent in its regular plan, compared with approximately 5.8 per cent for arbitrage funds over the same period. However, he cautioned that one year was too short a period to assess a strategy conclusively, particularly given the challenging equity market conditions.

Mehta also highlighted hybrid strategies that use options to seek less volatile outcomes than the broader equity market. He said investors should maintain a long-term asset allocation and diversify across products, rather than rely heavily on short-term market forecasts.

PMS has traditionally catered to wealthier investors, with a minimum investment threshold of ₹50 lakh. The proposed PMS Lite, or PRIM, category is expected to create opportunities for a broader range of investors and allow more professionals to participate in investment management.

Khemani said the initiative could help mutual fund distributors move from an advisory role towards managing investments. He also highlighted provisions allowing independent fund managers to operate under existing fund management platforms, potentially reducing operational and compliance burdens for smaller players.

However, he said PMS adoption continued to be constrained by cumbersome onboarding processes.

“The industry is also moving from just looking at products to looking at solutions,” Mehta said, arguing that specialised products could make wealth management more accessible by offering different investment approaches.

Technology and artificial intelligence (AI) are also helping asset managers improve research, risk management, and customer experience.

Jain said processes that previously took two to three hours could now be completed in minutes, allowing smaller teams to manage larger assets.

Mehta highlighted digital onboarding and portfolio analytics as ways to simplify transactions and reduce dependence on physical distribution. He said SIF distribution had already reached around 24–25 per cent of India’s pincodes, indicating scope for further expansion.

Khemani said technology should be viewed as complementary to human expertise rather than a replacement for it. Looking ahead, he expects India’s asset management industry to expand as more household wealth moves into professionally managed investments.