Market Data Needs for the Wealth Management Industry

by Arin Ray,  Isabella Fonseca, May 26, 2010
Product Trends/ Reviews
Asia-Pacific, EMEA, North America

Abstract

Celent estimates a total of US$1.2 billion in wealth management market data spending by the end of 2010, an increase of 5% from 2009.

In a new report, Market Data Needs for the Wealth Management Industry, Celent provides an overview of the needs and uses of market data in wealth management. Market data feeds and software are key tools for firms to increase efficiency, make secure investment decisions, comply with regulatory issues, use in long-term wealth planning and account management, develop new business leads or generate ideas, and facilitate customer communication.

For this research Celent interviewed a broad number of content providers, aggregators, redistributors, and end users drawn from all main markets (Europe, North America, and Asia). To provide an analysis for this report, the interviews examined these institutions’ business models, product offerings and functionalities, client base, emerging trends, and future plans.

Main findings of the study include:

  • Market data providers are moving beyond the traditional concept of data provision to include more advanced features like analytical tools and charting.
  • Firms are after an enterprisewide market data strategy.
  • The market data terminal is slowly fading. Web-based advisor dashboards allow for lower-cost deployments, maintenance, and quicker updates.
  • Different regions are at different levels of maturity with regards to market data: North America and Europe are more mature, while the Asian wealth management market is not as sophisticated.
  • While firms face the challenges of budget constraints in the aftermath of the financial crisis, heightened regulatory requirements ask for better systems to improve and address all compliance issues.

“There is increasing pressure on financial institutions to reduce their market data spending and ensure the entire firm is efficiently utilizing market data. However, there seems to be a general consensus that there will be an increase in overall spending on market data in the next two to three years. Spending on market data technology will focus on customized end user–driven requirements,” says Isabella Fonseca, Senior Analyst and coauthor of the report.

“While market data in general is considered a commodity, in the last 12 months market data providers have addressed the need of wealth managers by redesigning their products to provide one source of information—all in one place.” says Arin Ray, Analyst and coauthor of the report. “What is important today is not only the market data per se, but actionable advice based on that data.”

In this study, Celent aims to provide an understanding of the value of market data within the wealth management value chain, identify the market participants, and highlight best practices for market data tools across North America, Europe, and Asia. A short profile of some of the main players in the data marketplace is included, as well as a comparison of the functionalities of their solutions in this space. At the end of the study Celent presents concluding thoughts on the evolution of the wealth management data marketplace.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

5

 

Market Data for the Wealth Management Industry

5

 

Report Methodology

6

Users of Market Data

8

 

Wealth Management Functions and Market Data

9

 

Data Categories

10

 

Sources and Distributors of Market Data

11

Market Overview

13

 

Market Data Spending

15

 

Purchasing and Implementation

17

 

Market Structure

18

 

Differentiating in the Market Data Space

19

Market Data Vendors

21

 

Capital IQ

23

 

Dow Jones

25

 

Fundata Canada

27

 

Interactive Data Corporation

28

 

Morningstar, Inc.

33

 

QUICK

35

 

SIX Telekurs

37

 

StatPro

38

 

SunGard

38

 

Thomson Reuters

40

Vendor Comparison

45

Looking Forward / Conclusion

55

Leveraging Celent’s Expertise

57

 

Support for Financial Institutions

57

 

Support for Vendors

57

Related Celent Research

58

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