January 6, 2016
The wealth management industry continues to grow globally. Global HNWI (high net worth individuals) population and wealth expanded at moderate rates in 2014. The ultra-HNWIs which account for approximately 35% of HNWI wealth were significant drivers of global HNWI population and wealth growth in 2014.
US HNWIs is a dominant force in global HNWI wealth growth in 2014. The numbers of HNWIs in the country expanded considerably while their investable wealth has grown to US$15.2 trillion. Much of the US HNWI wealth is concentrated in metro areas representing about two-thirds of HNWI population, which is about three-quarters of its wealth.
The report analyzes the US HNWI wealth management players and their market share. The industry is highly fragmented with many small players. The US wealth management market is majorly dominated by banks; private players also have a significant market share in the industry.
The report highlights the changing landscape of the wealth management sector. It talks about the digital initiatives of various leading market players to incorporate the automated advisory services, digital solutions, analytics solutions which offer great potential to these firms to meet HNWIs’ growing demand for low-cost, digital services while also providing a means to expand their reach to mass affluent clients.
The wealth management sector is poised to grow more influential in the coming years. Greater attention is being paid to financial technology (FinTech) and the online landscape of wealth management, with financial advisers becoming more active in their use of social media to gain new clients and attract more assets. Considering the interests of the customers, in the coming years, it will be more important for advisers to engage with clients by using a broader spectrum of communication styles and platforms.
Robo-advisors are capitalizing on a growing opportunity in the wealth management industry, which is targeting the underserved segment of younger and smaller investors. Robo-advisors and some early-adopting traditional advisor firms are pursuing multiple strategies (such as marketing directly to retail clients and as a white labeled offering for financial advisors) to scale more rapidly in the market.
According to the report, wealth management firms across the world are spending billions on IT to differentiate themselves in the market. Analytics in wealth management allow a company to formulate investment strategies for its high-net-worth clientele. Wealth management firms are using big data analytics to gain new insights into their customers & prospects and discover investment opportunities. Big data technology plays a significant role in providing data capture, analysis and visualization solutions with respect to wealth management.
Traditional advisors are also being strategic in leveraging mobile and digital platforms to stay ahead in the competitive market.