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

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. 

The COVID-19 pandemic has resulted into weakening GDP growth, high volatility, and significant capital-market losses globally which has affected wealth-management firms business operations. However, with the shifts to virtual business practices, many wealth managers have aggressively reached out to their clients by phone to build further goodwill through a human touch.

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.

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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. 

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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.  

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.   

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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.

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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. 

Key Market Segments

By Business Model

• Human Advisory
• Robo Advisory
  • Direct Plan-Based/Goal-Based
  • Comprehensive Wealth Advisory
• Hybrid Advisory

By Provider

• FinTech Advisors
• Banks
• Traditional Wealth Managers
• Others  

By End-user Type

• Retail
• High Net Worth Individuals (HNIs)

By Region

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Switzerland
  • Italy
  • Spain
  • Rest of Europe 
• Asia-Pacific 
  • China
  • India
  • Japan
  • Australia
  • Singapore
  • Rest of Asia-Pacific   
• LAMEA
  • Latin America 
  • Middle East
  • Africa

Key market players

• 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
• UBS