Mumbai, Nov. 1: Wealth managers are upbeat about their business prospects following the signs of an economic revival and the rally in stocks.

The global financial crisis and recession had taken a toll on them as high net worth individuals (HNIs) rushed to withdrew their investible funds.

Firms such as DSP Merrill Lynch, which is a major player in a highly competitive market, expects their assets to grow 20-25 per cent, with the rich slowly returning into their fold.

Last year, the number of HNIs in the country dropped to 84,000 from 1.23 lakh in 2007.

In its wealth management business in India, Merrill Lynch focuses on those individuals who have at least $0.5 million in investible funds.

Pradeep Dokania, managing director and head of global private client at DSP Merrill Lynch, told The Telegraph that the situation had improved from March this year because of the combined effect of the Indian government’s stimulus packages and strong interest rate reductions.

“In 2009, the first quarter was bad. However, from the second quarter onwards, there has been an improvement. In India, there is a sense that the worst is over. Moreover, there is an optimism even at the global level that emerging countries such as China and India will play a major role when the economy fully recovers,’’ he said.

Merrill is following a two-pronged strategy to expand its business. It will maintain its focus on the five metros — Calcutta, Mumbai, Delhi, Chennai and Bangalore, which constitute the bulk of its business — and plans to increase its advisers by 20-25 per cent, annually. At present, there are 50 advisers guiding the HNIs in their investment plans.

Dokania’s optimism stems from the Asia-Pacific Wealth Report of Merrill Lynch Wealth Management and Capgemini, which states that the HNI population in India will triple by 2018. “It is estimated that by 2013, the wealth of HNIs in Asia will cross that of the US. The region will be the new source of wealth,” Dokania said.

Merrill is not only banking on an increased presence but also on a wider range of products.

The strategy of more option for its clients is part of the firm’s policy of promoting “disciplined’’ asset allocation.

“Even during the tough times, we did not see clients going away, we did a lot of handholding of clients, telling them not to put all their investible resources in one basket (stocks) and thus be a disciplined investor. This strategy worked and the firm did not see any client erosion though the clients did pull back on their investments,” he said.