An Elucidation On The Global Wealth Management Market

The opulent realm of wealth management experienced a remarkable ascent, flourishing at an impressive compound annual growth rate (CAGR) of 4.8% during the period spanning from 2015 to 2020. By the culmination of this period, its esteemed value had reached a staggering sum of nearly $475.9 billion. It is foreseen that the market shall experience a splendid growth, expanding at an impressive annual rate of 9.0%. 

The remarkable expansion of the developing market, accompanied by a notable surge in the population of esteemed individuals with substantial wealth, the advent of digitisation, and the elevated penetration of the internet, collectively served as catalysts for the growth observed during the historical period. 

The forthcoming expansion shall be propelled by a maturing populace, the ascent of opulent individuals’ affluence, an amplifying desire for unconventional ventures, a surge in individual investor allocations, and the mounting pervasiveness of the internet. The future growth of the wealth management business may be constrained by various potential factors, including the COVID-19 epidemic, the presence of fintech companies, the extensive range of services offered by asset managers, and the prevalence of passive investments.

Types Of Wealth Managers

Equity, fixed income, alternative assets, and sundry asset classes comprise the various segments of the illustrious wealth management sector. In terms of asset class categorization, the fixed income market triumphantly claimed a commanding 64.8% share of the illustrious wealth management market in the year 2020, thereby solidifying its position as the most substantial and prominent segment within this esteemed domain. With a Compound Annual Growth Rate (CAGR) of 9.2% spanning from 2020 to 2025, the fixed income market is anticipated to flourish at an accelerated pace within the realm of wealth management, particularly when distinguished by asset class.

Through the art of classification, the realm of wealth management is elegantly partitioned into three distinguished categories: the esteemed human advisory, the sophisticated robo advisory, and the harmonious hybrid. In the realm of advice mode classification, the human advisory market emerged as the most substantial sector within the wealth management market, encompassing a staggering 97.7% of the total in the year 2020. With a Compound Annual Growth Rate (CAGR) of a remarkable 20.5% spanning from the year 2020 to 2025, the realm of robo advisory is anticipated to exhibit unparalleled swiftness in its future expansion within the domain of wealth management, particularly when categorised by the mode of advising.

Private banks, esteemed investment managers, distinguished full-service wealth managers, reputable stockbrokers, and various other esteemed firms are encompassed within the diverse array of wealth management entities that constitute the expansive wealth management market segments. In the realm of wealth management, the private banks market emerged as the dominant force in 2020, commanding a substantial 41.1% share of the overall wealth management market. This remarkable feat solidifies its position as the foremost segment within this esteemed industry. 

Overview Of The Market

In accordance with the magnitude of enterprises, the realm of wealth management is segregated into prominent, moderately-sized, and diminutive establishments. In the year 2020, boasting an impressive 60.7% stake in the grand realm of wealth management, this particular market segment reigned supreme as the most substantial among its peers, catering exclusively to the esteemed clientele of large enterprises. With an impressive compound annual growth rate (CAGR) of 9.4% spanning from 2020 to 2025, the market pertaining to medium-sized and small-sized enterprises is anticipated to experience the most rapid expansion within the realm of wealth management, specifically in relation to organisation size.

The market for wealth management is intricately categorised into various segments, namely pension funds, insurance firms, sovereign wealth funds (SWF), high-net-worth individuals (HNWI), and the esteemed mass affluent market. These segments are meticulously defined based on the discerning nature of their clientele. In terms of clientele classification, the esteemed mass affluent market held a commanding share of 45.2% within the realm of wealth management in the illustrious year of 2020, thereby solidifying its position as the most prominent segment. 

Within the realm of wealth management, wherein customers are classified according to their unique characteristics, it is foreseen that the sovereign wealth fund (SWF) market shall flourish at an accelerated pace, boasting an impressive compound annual growth rate (CAGR) of 10.6% spanning the years 2020 to 2025. In the year of our Lord 2020, it was North America that didst lay claim to a staggering 53.7% of the esteemed global wealth management market, thus establishing its eminent status as the grandest region of them all. Western Europe proceeded forthwith, followed in due course by the remaining expanse of the globe. 

The regions of Asia Pacific and Western Europe shall witness the most rapid escalation in the realm of wealth management, with Compound Annual Growth Rates (CAGRs) of 9.62% and 9.61% correspondingly, as we venture forth. Africa and North America are foreseen to pursue these trends, with market growth rates of 8.9% and 8.6%, correspondingly.

An Elucidation On The Opulent Realm Of Wealth Management

In the realm of fragmented wealth management, a plethora of diverse participants can be found. In the year of our Lord 2020, the illustrious top ten contenders of the market didst lay claim to a most impressive 24.74% of the grand tapestry that is the overall market. Owing to stringent regulations, intense price rivalry, and various infrastructure challenges, the industry is exceedingly competitive. The primary culprits responsible for this fragmentation are the grandiose financial institutions, esteemed brokerage enterprises, illustrious investment banking firms, esteemed local merchant banks, and other distinguished banks that graciously provide similar goods and services to their esteemed regional clientele and industries.

Morgan Stanley, with a commanding 4.00% market share, emerged as the foremost contender, closely pursued by the esteemed Bank of America Corporation at 3.91%. UBS Group AG, with its notable prowess, secured a commendable 3.58% market share, while Wells Fargo & Co. demonstrated its mettle with a respectable 3.05% share. JPMorgan Chase & Co., a formidable force in the financial realm, claimed a noteworthy 2.99% share, followed by the esteemed Citigroup Inc. at 2.52%. HSBC Holdings plc, with its distinguished presence, secured a commendable 1.64% share, while The Goldman Sachs Group, Inc. showcased its prominence with a notable 1.26% share. 

Credit Suisse Group AG, with its esteemed reputation, claimed a commendable 1.04% share, while Industrial and BNP Paribas, with their respective contributions, secured a respectable 0.74% share. With an impressive compound annual growth rate (CAGR) of 7.1%, the global wealth management sector is poised to ascend from a modest $498.70 billion in 2020 to a remarkable $850.90 billion in revenue spanning the years 2021 to 2028.

The advent of FinTechs (financial technology) has greatly perturbed the realm of wealth management. Significant benefits encompass aiding individuals in cultivating intricate financial strategies and alleviating the burden of financial distress. Furthermore, the extensive embrace of digitalized offerings has also propelled the expansion of the market. 

The Influence Of The Covid-19 Pandemic On The Wealth Management Market 

Wealth management, an esteemed and refined investment advising service, graciously attends to the discerning needs of its esteemed clientele. To facilitate its esteemed clientele in the preservation and augmentation of their wealth, money management firms offer an all-encompassing and meticulous service. It bestows comprehensive counsel fortified by substantial research, alongside facile and personalised investment execution. 

It encompasses the art of devising meticulous strategies to assist esteemed clients in attaining their distinctive and enduring financial aspirations. This encompasses the realms of retirement planning, estate and legal planning, accounting and tax services, and, in essence, bestows a bespoke programme within the esteemed wealth services portfolio. Individuals of considerable wealth, commonly referred to as high-net-worth individuals (HNIs), who are fortunate enough to possess a devoted wealth manager, are bestowed with the privilege of receiving expert counsel on the allocation of their funds. 

In the month of March in the year 2020, the esteemed World Health Organisation officially deemed COVID-19 as a pandemic. This momentous declaration subsequently resulted in the implementation of travel restrictions, causing a great upheaval in the financial markets. Furthermore, the intricate web of supply chains and the overall output levels of various industries suffered severe and adverse consequences. The COVID-19 outbreak hath wrought a calamitous blow upon public health, impacting nearly every facet of humanity’s existence across the globe, whilst also unsettling faith in the global economy. 

The COVID-19 pandemic hath wrought a deleterious impact upon the demand for wealth management within the market, owing to the economic downturn, volatility within the international financial sectors, and a most uncertain market. The global pandemic exerted a profound impact on the investments held by discerning individuals, as well as the esteemed establishments entrusted with the noble task of managing their opulent fortunes. 

Wealth management firms have encountered formidable obstacles due to the utilisation of social media and artificial intelligence (AI) by enterprises boasting more extensive clienteles for customer engagement purposes. Due to the prevailing global health crisis, the demand for wealth management solutions has experienced a significant decline. 

Anticipated 

They are the forthcoming technological advancements that shall propel the expansion of the market. The utilisation of burgeoning technologies such as chatbots, the Internet of Things, artificial intelligence, and big data analytics has catalysed the expansion of the wealth management industry. Furthermore, wealth management enterprises are poised to allocate greater resources towards enhancing consumer engagement through the provision of digital and voice-activated aides, as the global landscape becomes increasingly digitised. 

Moreover, chatbots—sophisticated software tools that engage in online chat dialogues—are frequently employed by wealth management enterprises owing to their provision of a personalised and user-centric encounter surpassing that of mobile applications. By virtue of their remarkable capacity to comprehend the intricacies of natural language and acquire knowledge from vast troves of data, chatbots possess the capability to undertake screening tasks from a distance, diligently oversee transactions, execute orders with utmost precision, and graciously respond to inquiries posed by curious minds.

Wealth managers have the opportunity to enhance operational efficiency in both the front and back offices, maintain competitiveness, and attain a deeper comprehension of the products and services they provide through the implementation and investment in cutting-edge technology.  Kindly reach out to our esteemed analysts to acquire further insights regarding the advancements in the realm of the global wealth management market.

Insufficiency Of Pricing Transparency And Trust 

Transparency in the realm of pricing and the presence of competitive fees stand as two paramount factors for discerning clients in their evaluation and selection of wealth managers. In a striking revelation, it has been brought to light that a staggering 45% of esteemed clientele harbour a lack of trust towards their esteemed advisors in matters pertaining to the charging of fees for global assets. Furthermore, these discerning individuals express their discontentment with the pricing structure proffered by wealth managers, as reported by none other than the renowned purveyor of global assets and services, Vestmark, Inc. Henceforth, it is foreseen that a dearth of pricing transparency and elevated fees for wealth management services shall impede the progress of the market. 

Global assets are progressively proffering hybrid services to their esteemed clientele, encompassing both standardised and bespoke counsel. The primary impetus for the necessity of standardisation and customization of advice stems from the discerning and unwavering desire of consumers for reliable and dependable responses. Within this realm, wealth management firms are diligently cultivating computerised analysis to bestow standardised advisory services, all the while upholding the utmost intricacy of their offerings through bespoke solutions. 

It is foreseen that the esteemed human advisory sub-segment shall reign supreme in the global market, bestowing upon itself a grand sum of $516.67 billion in revenue throughout the projected period. In the bustling city of Hong Kong, a distinguished financial advisor possesses the remarkable ability to provide invaluable assistance. This is particularly advantageous as one may find themselves bereft of the precious resource of time, rendering it arduous to meticulously monitor and assess the performance of investments. 

To ensure that investments align harmoniously with esteemed financial aspirations, it is imperative to engage in the diligent practise of regular portfolio monitoring. Human advisors possess a myriad of advantageous qualities, including but not limited to their remarkable emotional intelligence, unparalleled adaptability, unwavering sense of responsibility, and their remarkable aptitude for providing specialised services.

The Wealth Management Market 

It is anticipated to witness a plethora of opportunities stemming from the emphasis on Hybrid Advisory. In the forthcoming era in Hong Kong, it is foreseen that the sub-segment of asset management shall procure the utmost revenue. By the year 2028, it is anticipated that the market shall generate a staggering sum of $224.92 billion in revenue, a remarkable increase from the modest figure of $142.35 billion witnessed in the year 2020. This growth shall be propelled by a commendable compound annual growth rate (CAGR) of 7.2%. By virtue of digitization, enterprises now possess a vast array of opportunities to augment their client interactions.

The esteemed global assets have come to a profound realisation that surmounting the myriad challenges in their management is of utmost importance, as it holds the key to their triumph or downfall in the midst of an ever-escalating competition. By virtue of this, numerous asset-intensive enterprises are fervently investing in avant-garde and pioneering solutions to fundamentally transform and revamp their operational methodologies.

Furthermore, the realm of private banking is currently in the process of implementing a highly sophisticated and refined client-centric approach, leveraging cutting-edge wealth management technologies. Banks possess the ability to manage the esteemed clientele’s esteemed financial assets from any distinguished locale within the illustrious city of Hong Kong. With a projected compound annual growth rate (CAGR) of a remarkable 8.4%, the Pacific market is anticipated to flourish expeditiously, surging towards an impressive valuation of $289.22 billion by the year 2028. 

The realm is poised to present burgeoning prospects for global assets owing to the heightened embrace of digital platforms. By virtue of the amalgamation of state-of-the-art data and formidable algorithms, clients well-versed in the realm of technology can efficaciously fulfil their investing requirements through the utilisation of robo-advising solutions. Moreover, the burgeoning multitude of diminutive and intermediate enterprises in the vicinity shall undoubtedly prove to be propitious for purveyors of wealth management software in the nascent realms of Hong Kong.