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The Global Wealth Management Market is estimated to be worth USD 1131.47 billion in 2027 with a CAGR of 7.02% between 2022 and 2027. The wealth management industry refers to the financial services industry that focuses on providing investment advice and services to high-net-worth individuals. It includes a range of services such as asset management, financial planning, estate planning, tax planning, and risk management. The market is driven by increasing global wealth accumulation and the need for professional assistance in managing and growing funds.
The market overview involves a comprehensive examination of market trends and analysis, incorporating insights from market research and growth strategies. Professionals engage in forecasting to anticipate market growth and trends, ensuring a proactive approach to meet evolving client needs and capitalize on emerging opportunities.
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Wealth management firms typically cater to affluent clients and offer personalized solutions tailored to their financial goals and risk appetite. With the rise of digital technology, online platforms have emerged as a popular channel for wealth management services, offering convenience and accessibility to clients.
One of the key factors driving the market growth is the rising demand for alternative investment support from the government. There is an increasing shift in preference from alternative investments to conventional forms of investments by HNIs and UHNWIs. An alternative investment refers to an investment in any asset class, excluding stocks, bonds, and cash. This comprises private equity or venture capital, hedge funds, real property, commodities, and tangible assets.
Moreover, some of the key advantages offered by these investments include diversification, a reduction in portfolio-related risks, and low transaction costs. However, these kinds of investments have an expensive fee structure when compared to other investments such as mutual funds and exchange-traded funds (ETFs). Thus, there is an increase in demand for market services among investors which is driving the market growth during the forecast period.
A key factor shaping the market growth is the change in demographic shift creating capital management opportunities. There has been a significant increase in the Gen Y population and the number of women billionaires across the world. As a result, it has become essential for funds management firms to strategically introduce portfolio management to gain a competitive advantage.
Moreover, there is an increasing focus on women HNIs by several funds management firms which are promoting many initiatives. For example, JPMorgan Chase and Co. launched the Women on the Move initiative that focuses on women-run businesses, right from startups to large corporations. Hence, such factors are expected to drive market growth during the forecast period.
Transaction risks are one of the key challenges hindering the market development. Transaction risks can be referred to as the risks faced by a corporation while performing financial transactions between countries. These kinds of risks mainly happen when a corporation conducts financial transactions or keeps financial records in a currency other than the one on which it is based.
Moreover, the main source of transaction risk is the duration between a transaction and a settlement. Some of the methods that are used to minimize transaction risks are forward contracts and options. However, such kinds of transaction risks can negatively impact the market, which will hinder the market growth during the forecast period.
The human advisory segment is estimated to witness significant growth during the forecast period. Human advisory plays an essential role in assisting individuals and organizations to make informed decisions about their asset management. The main advantage of this segment is that it provides personalized recommendations and guidance concerning individual financial goals, risk tolerance, and financial situation.
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The human advisory segment was the largest segment and was valued at USD 329.73 billion in 2017. Some of the key factors that are considered by this segment in order to offer personalized wealth managers and strategies include income, expenses, assets, liabilities, and investment preferences. Furthermore, the human advisory segment offers suggestions for budgeting and expense tracking and enables users to create budgets, categorize expenses, and monitor their spending habits. Other features of this segment include offering insights into investment options, asset allocation strategies, and risk analysis. Therefore, such advantages are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.
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North America is estimated to contribute 42% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Some of the main countries that are significantly contributing to the global market are the US and Canada. There is an increasing popularity in the US due to its high-income levels. Factors such as the requirement to minimize unnecessary taxes and strengthen financial security have fuelled the demand for financial advisors.
Additionally, rapid technological advances and evolving customer segments are also expected to contribute to the market growth in North America significantly. Furthermore, the presence of the management services sector, such as banks, wealth management firms, investment advisors, and insurance companies is expected to drive the market growth in the region during the forecast period.
Companies are implementing various market analyses and report a variety of strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Allianz SE: The company offers digital wealth management in collaboration with Moneyfarm.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. This market report also offers data that is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Market Analysis
Wealth management and strategic portfolio management is crucial for optimizing returns. Savvy wealth advisors play a pivotal role in retirement planning for high-net-worth individuals, integrating diverse assets like real estate and ensuring tax-efficient solutions. The wealth industry thrives on adept professionals managing savings and banking, aligning with client goals. Successful core lies in comprehensive estate planning, adeptly navigating markets, and transparent fee structures.
Market Scope |
|
Report Coverage |
Details |
Page number |
176 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.02% |
Market growth 2023-2027 |
USD 325.56 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
6.52 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 42% |
Key countries |
US, China, Japan, Germany, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Allianz SE, Bank of America Corp., BlackRock Inc., BNP Paribas SA, Citigroup Inc., FMR LLC, Fiserv Inc., HSBC Holdings Plc, JPMorgan Chase and Co., Julius Baer Group Ltd., Morgan Stanley, One Wam Ltd., Pictet Group Entities, PricewaterhouseCoopers LLP, State Street Corp., The Charles Schwab Corp., The Goldman Sachs Group Inc., The Vanguard Group Inc., UBS Group AG, and Wells Fargo and Co. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our market growth and forecasting report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
In response to a rising demand for personalized wealth management catering to the unique goals and needs of high net worth individuals, wealth management firms are grappling with the task of adequately tailoring their offerings. Despite the push to enhance immediate focus on seamless client communications and the adoption of digital advisor tools, these firms still find themselves playing catch-up in the realm of personalization.
Furthermore, to meet the evolving needs of consumers, wealth management entities are diversifying their services beyond the traditional scope, expanding into areas such as banking and insurance. The onset of the COVID-19 health crisis compelled a shift from face-to-face meetings to virtual calls, as physical lockdowns forced firms to adapt to new methods ie virtual business practice of addressing client needs. "The global repercussions of the COVID-19 pandemic include a decline in GDP growth, increased market volatility, and substantial losses in capital markets, impacting the operational landscape of wealth-management firms. Despite these challenges, the adoption of virtual business practices has spurred wealth managers to actively connect with their clients via phone, aiming to enhance goodwill through a more personalized, human touch."
Amidst these changes, traditional wealth management firms faced formidable challenges in keeping pace with digital adoption trends set by competitors. Nevertheless, the ongoing advancements in technologies serve as a catalyst, urging wealth executives to prioritize digital transformation within their existing business models.
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