How HNIs can protect family wealth: Diversification, liquidity and succession planning

India now has 1,687 individuals with a net worth of ₹1,000 crore or more, according to the M3M Hurun India Rich List 2025. Two-thirds of them, or 1,115 people, are self-made, up from 1,008 the previous year. Reinforcing this shift, 74% of new entrants are first-generation entrepreneurs. Below this threshold, many more Indian founders are crossing into high-net-worth individual (HNI) status through IPOs and secondary stake sales.

In our work with first-generation wealth creators, we frequently encounter a similar pattern. Net worth is concentrated largely in one operating business, along with a sizeable listed stake, some real estate, a few private investments made on instinct, and, increasingly, assets abroad. As wealth compounds, the challenge shifts from creating wealth to protecting, diversifying and transferring it across generations.

Most founders understand the building blocks: diversification, liquidity, risk management and estate planning. The real transition is from being an operator of a business to becoming a steward of family wealth, preserving the entrepreneurial instinct that built the fortune while ensuring that the family balance sheet is resilient, well-structured and built to endure.

A tailored financial framework for a founder can look like this:

1. Shift from maximising returns to avoiding mistakes

At ₹10 crore, chasing an extra percentage point of return feels meaningful. At ₹500 crore, avoiding a single portfolio accident matters more. This requires a customised “investment charter” that defines family objectives, risk thresholds and other non-negotiables, while setting a timeline for gradually moving wealth out of the operating business and into a diversified portfolio.

Sticking to this framework can help prevent impulsive decisions during personal emergencies or periods of market volatility.

2. Keep your entrepreneurial edge

While the core portfolio should be anchored in equity, fixed-income and multi-asset strategies guided by professional advisers, entrepreneurs do not need to abandon their instinct for growth. The family’s core capital should remain ring-fenced and protected, while a defined portion of wealth can be deployed into private equity, venture capital or direct investments.

These are areas where entrepreneurs can leverage their domain expertise, networks and entrepreneurial judgement. This allows them to pursue high-conviction, non-traditional opportunities without exposing the family’s core wealth to undue risk.

3. Treat liquidity as a strategic priority

Promoter stakes often come with lock-in periods, pledged-equity obligations and market scrutiny around any promoter sale. Meanwhile, private investments can take years to deliver exits.

With so much wealth locked up, an HNI portfolio should maintain a dedicated 10–15% liquid buffer in high-grade, accessible instruments. This helps ensure that the family is never forced to liquidate long-term assets during critical situations or market downturns.

4. Structure succession before circumstances decide for you

PwC’s latest Family Business Survey found that 36% of Indian family businesses have no clear succession plan, compared with 28% globally. For first-generation founders, separating business control from family wealth can be new and unfamiliar territory, while cultural discomfort around discussing death can make the process even more difficult.

As a result, wills are often deferred, nominations are mistaken for estate plans, and joint holding is assumed to ensure continuity. However, joint holding ensures continuity of access, not necessarily continuity of ownership. The deceased holder’s share may still be governed by applicable succession laws.

These tools can transform succession from an event into a well-governed transition: a Will that clearly defines inheritance, a Family Trust that preserves and governs family wealth across generations, and a Family Constitution that establishes principles for ownership, decision-making and family governance.

Where family members or assets span multiple countries, these structures must also work seamlessly across jurisdictions. A legacy should not be disrupted by borders.

Building a business demands extraordinary boldness. Preserving wealth across generations requires structured governance, unemotional discipline and risk management, underpinned by the core principles of preparedness and simplicity.

First-generation founders have created wealth at a remarkable speed. It is now time to build a financial legacy that outlasts them.

• Srinivas Mendum is CEO of FundsIndia Private Wealth.