India is witnessing a surge in first-generation High Net-Worth Individuals (HNIs). Fuelled by entrepreneurial success, tech-enabled exits, and rising executive compensation, this cohort is now the fastest-growing segment of the country’s wealthy. Over 15% of India's HNIs are under the age of 30, and this number is projected to rise to 25% by 2030. Additionally, nearly 20% of Indian millionaires are below the age of 40.
Many of these fortunes are being minted by startup founders and early employees. Bain & Company’s IVCA Report 2023 notes that almost 80% of India’s unicorn founders are first-time entrepreneurs. In addition, employees are also reaping substantial rewards through equity stakes in successful startups. One example is Flipkart's acquisition by Walmart in 2018. During the acquisition, the $500Mn buyback component resulted in approximately 100 current and former employees becoming dollar millionaires overnight.
Beyond startups, corporate compensation among young professionals in high-growth sectors such as technology, consulting, and investment banking among others is also rising sharply, thereby accelerating wealth creation at earlier stages of careers.
However, for these new wealth creators, accumulating capital is only the first chapter. The true challenge lies in what follows: preserving, growing, and seamlessly transferring that wealth across generations. On this multi-generational playing field, India’s long-established business families enjoy a decisive edge, thanks to well-honed philosophies, resilient structures, and a disciplined, governance-driven approach to money.
What can today’s first-generation wealth creators learn from legacy families? In this article, we distil time-tested practices that are vital to bridge the gap between wealth creation and multi-generational endurance.
1. Disciplined investing
One of the hallmarks of legacy families is their unwavering commitment to disciplined investing. They operate with methodical precision, adhering strictly to pre-defined strategic asset allocations. This involves firstly curating a portfolio diversified across asset classes and defining limits for each of them which will be rebalanced basis market movements.
For first-generation HNIs in India, instilling this same discipline is key, and a crucial tool for achieving it is drafting a robust Investment Policy Statement (IPS). An IPS is a formal, written document that serves as your portfolio's constitution. It meticulously lays down specific guidelines governing all investment decisions, effectively removing emotional biases from the investment process. By committing to an IPS, first-gen wealth creators can ensure they stay the course irrespective of market movements.
2. Fee-only advisory model
Within the scope of wealth management services, there are two models: the distribution model and the advisory model. While the former focuses on selling financial products and earning commission incomes, the latter is rooted in offering unbiased, fee-based advice tailored to the client's specific needs thereby eliminating conflicts of interest
Today, fee-only wealth advisory in India is emerging as a trusted approach for discerning investors and legacy families seeking product-agnostic financial planning. For first-generation HNIs who are new to wealth management, this approach offers transparency and access to holistic strategies that are adapted to their unique risk appetite, cash flows, succession planning objectives, and lifestyle aspirations.
3. Global diversification
Multi-generational family offices are committed to global diversification. By strategically spreading their capital across geographies, they build resilience against unforeseen domestic shocks and capture worldwide opportunities. This often involves the disciplined utilization of the Liberalised Remittance Scheme (LRS), which permits Indian multi-member families to systematically channel a max of USD 250K into a diverse global asset base.
Global diversification for Indian HNIs has become a vital tool to reduce concentrated domestic risk and participate in international opportunities. The good news is that international diversification is now more easily accessible. With curated global investment strategies available at entry points as low as $25,000, first-generation HNIs can now approach global investing with the same systematic rigor as legacy families, building a portfolio that ensures both geographic and currency diversification.
4. Private markets
Traditionally, access to exclusive private market opportunities—such as top-tier private equity or venture capital funds—was reserved for an elite few who could write cheques upward of INR 20 cr. . Select legacy families cornered these high-potential avenues, leveraging them for significant long-term growth and diversification away from public market volatility.
However, that access gap is now significantly narrowing, thanks to the pioneering innovative structures. For instance, at Waterfield, first-generation HNIs in India can invest in premier private equity and venture capital funds and exclusive co-investment opportunities with substantially lower entry tickets through the Fund of Funds solution. This allows them to build a well diversified portfolio comprised of a unique selection Quartile 1 PE/VC fund managers.
5. Philanthropy
For legacy families, philanthropy is an institutionalized pillar that is part of their long term portfolio planning. This planned approach is evident in India, where family philanthropy contributes nearly 40% of all private giving, playing a pivotal role in national development.
There is a significant shift visible among first-generation wealth creators who proactively use philanthropy to build a deeper sense of purpose with an obligation to develop the ecosystem that enabled their success. By earmarking funds for social impact in their portfolio, HNIs can help build a legacy that go beyond business success.
6. Succession Planning
Strategic succession planning is arguably the bedrock of enduring family wealth, they move beyond simple wills, instead leveraging tools like Trusts. Families strategically employ trusts as powerful instruments for both tax efficiency and robust asset protection. This foresight not only safeguards wealth but also minimises future disputes among heirs.
First-generation HNIs often prioritise wealth creation over succession planning, sometimes relying only on a basic will. This contrasts with the detailed, multi-layered planning typical of legacy families. A structured succession plan is crucial to protect both their wealth and the values that underpin it.
7. Managing the Emotional Complexity of Wealth
Legacy families possess a deep understanding of the emotional complexities of wealth, which they navigate by practically involving and having open conversations with the next generation from an early age. This instils an appreciation for opportunity and a profound sense of stewardship. However, many first-generation wealth creators hesitate to have these crucial conversations, for fear of blunting ambition or distorting core values.
Wealth conversations need not be a one-time, tactical activity, nor should they be avoided. With consistent dialogue, HNIs can strike a vital balance. This involves transparently conveying the values associated with wealth and discussing the responsibilities and nuances of building and preserving it. These conversations are important to prepare the younger generation to be effective custodians of wealth.
Building Legacy
The true difference between legacy families and first-generation HNIs is perspective. For India’s new wealthy, the direction is clear: build not just balance sheets, but belief systems; not just wealth, but a way to steward it.
The transition from wealth creation to wealth preservation is where many falter. However, by adopting time-tested strategies for multi-generational wealth planning, today’s HNIs can evolve into tomorrow’s legacy families.
