Photo Gallery: Gallery- Aite Group: Top 10 Wealth Management Trends for 2013

Jan. 17, 2013

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The largest management firms will seek growth strategies through buying out rivals; smaller or mid-sized firms will do so by partnering with third party software providers to boost existing businesses. Firms to watch in this gambit include National Financial and Pershing and third-party brokers such as Cetera Financial Institutions.
Fee-For-Service Push

Eyes will be on the UK and Australia as all licensed financial advisors there move to a fee-for-service model, and full fee transparency is mandated. Commissions and inducements from providers are outlawed as of 2013. These reforms, says Aite analyst, Sophie Schmitt, will influence the U.S. over time, particularly as UK-based firms with a presence in the U.S. leverage their "fiduciary models" in America to attract clients.
Growing Up

RIAs, long the small shop advisor, will become a real business, by becoming more efficient and improving their business processes. That will come partially from the continued increase in experienced wirehouse brokers entering the space, as well as the push by rollup firms like HighTower and others.
Moving On

Expect advisors to get more serious about identifying their successors and putting them in contact with the next generation of clients—largely their current clients’ children. A 2012 survey by Aite Group found 40 percent of “practice owners” wants to transition to another party within ten years.
Coming Home

An “international” business will no longer be the ambition of every wealth management firm based in a country, like the U.S., that suffered under the global recession. Firms in the U.S. and U.K. will reassess, and pare back, their global strategies. Firms domiciled in less hard-hit countries, like Canada, will fill in the void and find opportunities abroad.
Going Downmarket

Independent wealth managers, often referred to as external asset managers or financial intermediaries and usually serving the ultra-high-net-worth market through a family office, will thrive. This wealth management model will move downscale to the high-net-worth segment of the market as more become aware of their independence and more client-friendly compensation models.
Online Brokers Build Out

With stock trading in decline, online brokers will ramp up their product offerings to lure active traders, the sorts who place at least three trades monthly. Expect these online brokerages to expand into currency and options trading and to roll out more bells and whistles on their sites.
In The Clouds

Cloud-based trading will emerge as another way for firms to add a layer of operational safety. In addition, the shift to cloud-based technology will reduce the distances between counterparties, lower connectivity costs and bring more transparency and competition.
Tax Changes = Advisor Opportunities

The “partial bargain,” as Aite puts it, that came out of the American Taxpayer Relief Act of 2012 gives advisors a strong theme for engaging clients this year: Tax policy changes. Changes to rates on income, payroll, investment and transfer taxes is still a moving target, and will provide plenty of fodder for advisors to revisit financial strategies with their clients. A conclusive deal to reduce spending in Washington is likely to occur with a new deadline emerging in DC.
Getting Geeky

Advisors will continue to deploy more electronic tools to collaboratively engage their clients with financial planning and other cutting edge functionality. Clients will have a 24/7-style access to their financial plan through client websites.

Wealthy Americans are on edge, worried about their investments as Washington drags its heels on a permanent deal to avoid a fiscal-cliff type disaster. So not surprisingly, the economy and the politics of wealth are among this year’s Top 10 trends to watch, according to a new report by the Aite Group. On the plus side: advances in trading and technology.

Gallery- Aite Group: Top 10 Wealth Management Trends for 2013

More Mergers

Fee-For-Service Push

Growing Up

Moving On

Coming Home

Going Downmarket

Online Brokers Build Out

In The Clouds

Tax Changes = Advisor Opportunities

Getting Geeky

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Gallery- Aite Group: Top 10 Wealth Management Trends for 2013

More Mergers

Fee-For-Service Push

Growing Up

Moving On

Coming Home

Going Downmarket

Online Brokers Build Out

In The Clouds

Tax Changes = Advisor Opportunities

Getting Geeky

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