The Global Wealth Management Market Anticipated to Generate a Revenue of $850.90 Billion, Growing at a CAGR of 7.1% from 2021 to 2028Download Sample Reports Overview
The global wealth management market size is estimated to be valued at $850.90 billion by 2028, surging from $498.70 billion in 2020, at a CAGR of 7.1%.
COVID-19 Impact on the Wealth Management Market
During the COVID-19 pandemic, the global wealth management market trends is projected to be negatively impacted. Both investors and wealth management organizations suffered losses as a result of the coronavirus pandemic, and investors' existing assets were affected. Larger organizations have also relied on technology methods of communication with customers, such as artificial intelligence (AI) or social media, offering a threat to wealth management firms. Demand for wealth management products has decreased as a result of the global health crisis.
Global Wealth Management Market Analysis
The growth is likely to be fueled by an increase in the number of high net worth individuals (HNWIs) around the world. HNWIs have cultivated a tight working connection with investment banks and independent financial advisors in order to understand their company goals and build investment strategies. HNWIs participate in financial markets to maximize their profits. Traditional wealth management of an ever-increasing number of individuals is a difficult and hazardous responsibility for financial institutions. As a result, demand for tools or systems to automate wealth management procedures is steadily increasing.
Inadequate technological skills among business professionals, on the other hand, is expected to be a challenge. In addition, a lack of understanding among businesses about the benefits of wealth management software is projected to stymie industry growth.
To make their commercial responsibilities easier, many companies are turning their focus to digital platforms. The wealth management system enables organizations to keep track of transaction accounts and manage wealth more effectively. Over the projected period, technological advancements in the fields of blockchain and artificial intelligence (AI) are likely to drive market expansion. The AI system keeps track of the customer's spending and gives them appropriate advice. The blockchain and AI track the customer's cost and record trend and create estimates based on that information. The system generates advise and provides support to the consumer based on these estimates, allowing them to successfully manage their expenses.
Global Wealth Management Market, Segmentation
The global wealth management market is segmented based on advisory type, service type, providers, and region.
The advisory type sub-segment is further classified into human advisory, robo advisory, and hybrid advisory of which the human advisory type sub-segment is projected to generate the maximum revenue during the forecast period. The human advisory sub-segment is predicted to have a dominating market share in the global market and register a revenue of $516.67 billion during the forecast period.
A financial advisor can help because it is not always possible to monitor and assess investment performance. To ensure that investments are aligned with financial goals, portfolio monitoring is essential on a regular basis. Human advisors offer a number of benefits, including emotional sensitivity, flexibility, accountability, and the ability to deliver personalized services.
The service type segment is further classified into asset management, financial planning, tax planning, estate planning, and others sub-segments of which the asset management sub-segment is projected to generate highest revenue during the forecast period. It is predicted that the asset management market shall generate a revenue of $224.92 billion by 2028, growing from $142.35 billion in 2020, with a CAGR of 7.2%.
Because of digitization, businesses today have a wealth of possibilities for strengthening their client interactions. Asset-intensive companies have discovered that, in the face of increased competition, overcoming managerial challenges is vital to their success or failure. As a result, several asset-heavy businesses are investing extensively in advanced and innovative solutions to drastically change and update their business operations.
The providers segment is further divided into divided into banks, investment management firms, and brokerage firms. Among these, banks sub-segment is expected to be the fastest growing. It is predicted that the banks sub-segment market shall generate a revenue of $439.6 billion by 2028, growing from $251.65 billion in 2020, with a CAGR of 7.4%.
The global economy is predicted to increase over the forecast period, and private banking is expected to play a key role in managing individuals' growing assets and wealth. Furthermore, wealth management software is being used by banks to provide a client-centric strategy. Banks can also handle people's financial assets from any location.
The wealth management market demand in Asia-Pacific is anticipated to be the fastest growing market during the forecast time period and reach $289.22 billion by 2028, with a CAGR of 8.4%.
The Asia-Pacific regional market is estimated to develop at the quickest rate throughout the forecast period. The region is projected to create growing opportunities for private wealth management because of the increased utilization of digital platforms. Because of the combination of innovative data and advanced algorithms, technologically savvy customers can employ robo advising solutions to efficiently meet their investing demands. In addition, wealth management software firms in rising economies like China and India are projected to benefit from the region's expanding number of small and medium businesses.
Top 10 Major Key Players in the Global Wealth Management Market are -
- Bank of America Corporation
- BNP Paribas
- Charles Schwab & Co., Inc.
- Citigroup Inc.
- CREDIT SUISSE GROUP AG
- Goldman Sachs
- JPMorgan Chase & Co.
- Julius Baer Group
- Morgan Stanley
Along with the key players of the wealth management companies in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Wealth Management Market:
- Bargaining Power of Suppliers: Wealth management market contains huge concentration of distributors and suppliers and hence, the distributors and supplier control are expected to be moderate, resulting in moderate bargaining power of dealers.
Hence, the bargaining power of the supplier is moderate.
- Bargaining Power of Buyers: Buyers will have high bargaining power, significantly because of high players operating in the wealth management market.
Hence, the bargaining power of the buyer is high.
- Threat of New Entrants: In the modern world, new entrants may face multiple new barriers, like legal and government policies.
Hence, the threat of the new entrants is moderate.
- Threat of Substitutes: There are few alternate products for wealth management.
Thus, the threat of substitutes is moderate.
- Competitive Rivalry in the Market: Robust presence of key players such as Bank of America Corporation, BNP Paribas, and Charles Schwab & Co., Inc. is creating massive rivalry in the local as well as international market. Also, high spending on business expansion and strategic tie-ups are some of the main factors rising competitive rivalry among the companies.
Thus, the competitive rivalry in the market is high.