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2021

Wealth Management Market

Wealth Management Market By Business Model (Human Advisory, Robo Advisory, and Hybrid Advisory), Provider (FinTech Advisors, Banks, Traditional Wealth Managers, and Others), and End-user Type (Retail and High Net Worth Individuals (HNIs): Global Opportunity Analysis and Industry Forecast, 2021-2030

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Author's: Aarti Goswmi| Pramod Borasi| | Vineet Kumar
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Wealth Management Market Outlook - 2030

The global wealth management market size was valued at $1.25 trillion in 2020, and is projected to reach $3.43 trillion by 2030, growing at a CAGR of 10.7% from 2021 to 2030. 

Wealth management is an investment advisory service that combines investment and financial counselling to address the needs of wealthy clients. It involves in providing strategies to achieve certain financial goals over a period of time, planning for retirement, accounting & tax services, estate & legal planning, and generally provides a personalized strategy under the portfolio of wealth services. These services are mostly offered to high net worth individuals (HNIs) having their assigned dedicated wealth manager engaging in providing recommendations for fund allocation to the investors.

Wealth-Management-Market

Rapid demand for alternative investments such as private equity, commodities, hedge funds, real estate investment trusts (REITs), and intellectual property act as the key driving forces of the global wealth management market. In addition, emergence of FinTechs (Financial technology) has largely disrupted wealth management industry and major benefits provided by wealth management such as helping in eliminating financial stress & creating financial plans, and massive incorporation of digitalized offerings are contributing toward the market growth. However, lack of pricing transparency & higher fees and strict rules & regulations of the government for wealth management firms are some of the factors that limit the market growth. 

On the contrary, developing economies offer significant opportunities for wealth management companies to expand their offerings, as several high net worth & ultra-high net worth individuals continue to demand wealth management product lines, especially among the emerging economies such as China, India, Indonesia, Malaysia, the Philippines, Taiwan and Thailand. Moreover, wealth management firms are rapidly switching toward digitalized business operations, thus, adoption & implementation of technologies such as chatbots, big data analytics, IoT, and artificial intelligence (AI) has increased tremendously, which is anticipated to open new avenues for the market in the coming years.

The report focuses on growth prospects, restraints, and trends of the wealth management market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the wealth management market outlook.

Segment Review

The wealth management market is segmented into business model, provider, end-user type, and region. By business model, the market is segregated into human advisory, robo advisory, and hybrid advisory. The robo advisory segment is further bifurcated into direct plan-based/goal-based and comprehensive wealth advisory. Depending on provider, it is segmented into FinTech advisors, banks, traditional wealth managers, and others. Based on end-user type, the market is divided into retail and high net worth individuals (HNIs). Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. 

Wealth Management Market
By Business Model
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Robo Advisory segment will grow at a highest CAGR of 26.4% during 2021 - 2030

Competitive Analysis 

The report analyses top wealth management companies operating in the market such as Bank of America Corporation, BNP Paribas, Charles Schwab & Co., Inc., Citigroup Inc., CREDIT SUISSE GROUP AG, Goldman Sachs, JPMorgan Chase & Co., Julius Baer Group, Morgan Stanley, and UBS. These players have adopted various strategies to increase their market penetration and strengthen their position in the wealth management industry.  

Market Landscape and Trends

The market landscape has become increasingly competitive, driven by advancements in technology, changing client expectations, and regulatory reforms. Wealth management firms are leveraging digital solutions and innovative technologies to enhance client experiences, streamline operations, and deliver personalized services. Robo-advisors, powered by artificial intelligence and machine learning, have gained prominence, offering low-cost investment solutions and automated portfolio management. In addition, sustainable and impact investing has emerged as a key trend, with investors seeking to align their portfolios with environmental, social, and governance (ESG) criteria. Furthermore, the rise of millennial and female investors has prompted wealth managers to adapt their strategies to cater to the unique preferences and values of these demographic segments. Overall, the wealth management market continues to evolve rapidly, presenting both opportunities and challenges for industry participants. Therefore, these are some of the major market trends of the wealth management market.

Government Initiatives

Governments globally have recognized the importance of the wealth management market to drive economic growth and foster financial stability. In response, they have implemented various initiatives to support and regulate this sector. In developed countries such as the U.S., the government has introduced measures to enhance investor protection and promote transparency. Regulatory bodies such as Securities and Exchange Commission (SEC) enforce stringent rules to ensure fair practices and prevent fraudulent activities. In addition, tax incentives and retirement savings plans, such as Individual Retirement Accounts (IRAs) and 401(k) plans, encourage individuals to invest and save for their future. Furthermore, in emerging economies such as China, the government has taken steps to expand the wealth management industry. They have introduced reforms to liberalize financial markets, allowing foreign investors greater access and participation. Moreover, the China government has launched initiatives to encourage domestic consumption and bolster the middle class, providing opportunities for wealth management firms to cater to the growing demand for investment products and services.

In addition, the Gulf Cooperation Council (GCC) countries, governments have focused on developing their wealth management markets as part of broader diversification strategies. Hence, governments globally are taking proactive measures to foster the growth of the wealth management market. Thus, by implementing robust regulations, promoting transparency, and encouraging investor participation, these initiatives aim to create a conducive environment for wealth creation, financial stability, and sustainable economic development.

COVID-19 Impact Analysis

The COVID-19 pandemic has a negative impact on the wealth management market, owing to economic slowdown, unpredictability in global financial sectors, and highly volatile market. The pandemic has affected both investors and wealth management firms and investors experienced direct impacts on their existing portfolios. Moreover, firms with larger customer bases have relied on electronic means through artificial intelligence (AI), or social media to connect with their clients, which has become challenging factors to the wealth management firms. Therefore, demand for wealth management product offerings has declined tremendously during the global health Crisis. 

Top Impacting Factors

Emergence of FinTechs 

Wealth managers are increasingly investing in new technologies such as robo-advisor, artificial intelligence (AI), robotic process automation, and digital identification (ID) technologies for improving customer experience. FinTechs (Financial technology) has largely disrupted wealth management industry. FinTechs include a wide range of new technology used to improve and automate the delivery of financial services. 

Moreover, robo-advisor technology is increasingly used among wealth management providers, as it involves automated & algorithm-based systems to provide customized portfolio management advices to the customers. For instance, in 2019, a study conducted by Ernst & Young Global Limited, which is a multinational professional services projected that usage of FinTech will increase from 38% to 45% in the next three years. This growth will further boost wealth segment among mass affluent clients with nearly 35% growth and 41% growth among high-net-worth individual (HNWI). Growth in FinTechs therefore enhances efficiency and transparency in wealth management business operations, which, as a result is significantly fueling the market growth.   

Wealth Management Market
By Provider
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FinTech Advisors segment will dominate the market with a highest CAGR of 16.8% during 2020 - 2030

Lack of Pricing Transparency and Competitive Fees

Pricing transparency and competitive fees are two of the most important factors for clients while evaluating and selecting wealth managers in the market. For instance, Vestmark, Inc., which is a leading provider of wealth management solutions & services in the U.S. projected that 45% clients do not trust their advisors while charging fees for wealth management and are dissatisfied with the fees structure provided by wealth managers. Therefore, lack of pricing transparency and higher fees charged for wealth management offerings are expected to limit the market growth.  

Technological Advancements

Increased adoption of advanced technologies such as chatbots, IoT, AI, and big data analytics, have led toward the wealth management market growth. In addition, with increase in digitalization, wealth management providers are looking forward to quickly invest on client engagement by providing digital and voice-enabled assistants. Moreover, chatbots, which is a software application used to conduct an on-line chat conversation, are largely used by wealth management firms, as it helps in offering more personalized & user-friendly experience than mobile applications. 

In addition, with their use of natural language processing & machine learning capabilities, chatbots answer questions, monitor transactions, place orders, and perform screening functions remotely. Implementation & investment in technologies help wealth managers to remain competitive, achieve deep insight into the products & services offered, and improve operational efficiency for both the front and back office activities. Therefore, the possibilities of technological advancements are unlimited, which are expected to create remunerative opportunities for the growth of the wealth management market.

Wealth Management Market
By Region
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Asia-Pacific would exhibit the highest CAGR of 12.7% during 2021-2030

 

Key Benefits for Stakeholders 

  • The study provides in-depth analysis of the global wealth management market share along with current trends and future estimations to illustrate the imminent investment pockets.
  • Information about key drivers, restrains, and opportunities and their impact analysis on the global wealth management market size are provided in the report.
  • Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the wealth management market.
  • An extensive analysis of the key segments of the industry helps to understand the wealth management market trends.
  • The quantitative analysis of the global wealth management market forecast from 2021 to 2030 is provided to determine the market potential. 

Wealth Management Market Report Highlights

Aspects Details
Wealth Management Market By Business Model
By Business Model
  • Human Advisory
  • Robo Advisory
    • Direct Plan-Based/Goal-Based
    • Comprehensive Wealth Advisory
  • Hybrid Advisory
Wealth Management Market By Provider
By Provider
  • FinTech Advisors
  • Banks
  • Traditional Wealth Managers
  • Others
Wealth Management Market By End-user Type
By End-user Type
  • Retail
  • High Net Worth Individuals (HNIs)
Wealth Management Market By Region
By Region
  • North America  (U.S., Canada, Mexico)
  • Europe  (France, Germany, Italy, Spain, UK, Russia, Rest of Europe)
  • Asia-Pacific  (China, Japan, India, South Korea, Australia, Thailand, Malaysia, Indonesia, Rest of Asia-Pacific)
  • LAMEA  (Brazil, South Africa, Saudi Arabia, UAE, Argentina, Rest of LAMEA)
Key Market Players
Key Market Players

Charles Schwab & Co., Inc., CREDIT SUISSE GROUP AG, MORGAN STANLEY, Julius Baer Group, CITIGROUP, INC., BANK OF AMERICA CORPORATION, JP MORGAN CHASE & CO., Goldman Sachs, BNP Paribas, UBS

Analyst Review

With an increasing demand for wealth management in terms of unique goals & needs among high net worth individuals, wealth management firms are still lagging behind in personalizing their offerings adequately. Moreover, these firms are aiming at enhancing immediate focus toward seamless client communications and adopting digital advisor tools. Firms in wealth management sector are increasingly expanding their offerings to other financial services such as banks & insurance, in order to meet changing consumer needs.

During the COVID-19 health crisis, physical lockdowns across countries have forced wealth management firms to replace face-to-face meeting with virtual calls to address client needs. In addition, traditional wealth management firms faced daunting challenges in terms of digital adoption by competitors. Conversely, advancement in technologies encourages wealth executives to prioritize digital transformation in the existing business model.

The wealth management market is fragmented with the presence of regional vendors such as BNP Paribas, JPMorgan Chase & Co., and Morgan Stanley. Some of the key players profiled in the wealth management market report include Bank of America Corporation, Charles Schwab & Co., Inc., Citigroup Inc., CREDIT SUISSE GROUP AG, Goldman Sachs, Julius Baer Group, and UBS. Major players operating in this market have witnessed significant adoption of strategies that include business expansion and partnership to reduce supply and demand gap. With increase in awareness & demand for wealth management across the globe, major players are collaborating their product portfolio to provide differentiated and innovative products.

Author Name(s) : Aarti Goswmi| Pramod Borasi| | Vineet Kumar
Frequently Asked Questions?

The wealth management Market is estimated to grow at a CAGR of 10.7% from 2021 to 2030.

The wealth management Market is projected to reach $3.43 trillion by 2030.

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Factors such as rapid demand for alternative investments such as private equity, commodities, hedge funds, real estate investment trusts (REITs), and intellectual property drives the growth of the wealth management market

The key players profiled in the report include Bank of America Corporation, BNP Paribas, Charles Schwab & Co., Inc., Citigroup Inc., CREDIT SUISSE GROUP AG, Goldman Sachs, JPMorgan Chase & Co., Julius Baer Group, Morgan Stanley, and UBS and many more.

On the basis of top growing big corporations, we select top 10 players.

The wealth management Market is segmented on the basis of business model, provider, end-user type, and region.

The key growth strategies of wealth management market players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.

subsegments of provider are FinTech advisors, banks, traditional wealth managers, and others.

Robo Advisory segment will grow at a highest CAGR of 26.4% during 2021 - 2030

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Wealth Management Market

Global Opportunity Analysis and Industry Forecast, 2021-2030