When Smart Money Trips: Anand Rathi’s Feroz Azeez Calls Out HNI Bias

Image Source: Moneycontrol

At Moneycontrol’s “Diwali Wealth Formula” roundtable, Anand Rathi Wealth’s Deputy CEO Feroz Azeez challenged the myth that High Net Worth Individuals (HNIs) are smarter investors. Citing data, he showed that when markets were low, HNIs sold equities worth ₹3.25 lakh crore while retail investors bought, proving “emotional bias beats access and affluence.”

The long-held stereotype of affluent investors as “smart money” is facing data-driven scrutiny. Feroz Azeez, one of India’s leading wealth strategists, has questioned whether wealth equates to wisdom, arguing that many wealthy investors display the same behavioural flaws as retail traders—sometimes magnified.

Key Highlights

The Core Finding: Azeez presented evidence showing that in FY21, when the Nifty averaged 10,732, HNIs sold ₹1.25 lakh crore of equity mutual funds and ₹2 lakh crore from portfolio management services (PMS). Meanwhile, retail investors bought ₹94,000 crore worth of equity units. “HNIs sold at lows and bought at highs,” Azeez emphasized.

Retail Investors Outperform: According to Azeez, this reversal underlines how disciplined investing through SIPs and passive portfolios has often yielded better risk-adjusted returns than complex, speculative portfolios managed by high-net-worth individuals.

Access vs. Acumen: “Many wealthy investors confuse access with acumen,” he said, arguing that HNIs often chase complexity — indulging in high-ticket unlisted equities and private credit—neglecting basics like asset allocation and rebalancing discipline.

Behavioural Biases: Wealthier investors, Azeez noted, succumb more to recency bias—allocating aggressively after rallies and withdrawing during drawdowns. “When emotions drive decisions, even large portfolios lose direction,” he warned.

Simple over Sophisticated: He pointed out that many ₹100-crore portfolios underperform smaller retail accounts simply because individuals “stick to planned allocation formulas instead of chasing returns.” His advice: simplicity and consistency trump flamboyant diversification.

Changing the Industry Mindset: The discussion, featuring top wealth managers including Umang Papneja (Julius Baer) and Rajesh Saluja (ASK Wealth), concluded that India’s wealth management market must evolve from product-pushing to transparent, advisory-led models that prioritize investor behaviour correction over portfolio expansion.

Shifting the Wealth Paradigm

Azeez’s remarks ignite a vital debate: does financial sophistication truly equate to superior investing instincts? His conclusion was clear—real “smart money” thrives on patience, diversification, and discipline, not privilege.

Sources: Moneycontrol

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