Wealth Management Market: Capturing the Hearts and Wallets of the Mass Affluent

November 8, 2001

Abstract

Boston, MA, USA November 8, 2001

Celent predicts that financial institutions can expect to earn over US$300 billion in management fees alone in 2005 by attracting the mass affluent customer segment, who are defined as those individuals with investable assets of between US$100,000 and US$1 million.

In a new report entitled “ ,” Celent Communications closely examines the emerging mass affluent segment and provides strategies for financial institutions to attract and retain the financial assets of these mass affluent investors.

Over the past year, the hype surrounding self-directed online financial planning tools has declined dramatically. Instead, a new wave of wealth management tools have focused on providing a robust suite of online tools for the advisors so that they can effectively manage and advise a large number of clients. In essence, the focus on online wealth management services has changed from disintermediating the human advisors to arming those human advisors to play a central role in their clients’ day-to-day money management.

According to Sang Lee, co-author of the report, “The sudden downturn in the US financial markets over the past year has really dampened the spirit of self-directed investing. Instead, the focus has turned to the concept of wealth management services. Overreliance on transactions alone has burned those firms focused on no-frills self-directed investing. We expect to see a significant number of financial institutions implementing Web-based wealth management services in the hope of diversifying their revenue stream. ”

Isabella Fonseca, co-author of the report, adds that, “The mass affluent segment exhibits a rapid rate of asset growth and represents large numbers of individuals. As a result, those firms interested in establishing formidable wealth management services in the future cannot afford to ignore the mass affluent customer segment”

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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 operating unit 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

 

  Boston, MA, USA  November 8, 2001 Return to report Abstract
EXECUTIVE SUMMARY 3
INTRODUCTION 4
MARKET OVERVIEW 6
  What is Wealth Management? 6
  Customer Segmentation 7
  Projected Asset Accumulation 11
  Technology in Online Wealth Management 14
  Wealth Management Segmentation 16
GLOBAL MARKET PROJECTIONS 18
  Market Penetration 19
  Projected Growth in Technology Adoption 20
  Cost of Technology Implementation 22
SUCCESSFUL STRATEGIES 24
  Merrill Lynch 25
  Invesco Asset Management 25
  Deutsche Bank 26
  AXA 26
  Barclays Bank 26
  AMP 27
FUTURE OUTLOOK 28

 

        

 

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