Wealth Management Statistics By Regions, Future, Market And Artificial Intelligence

Introduction

Wealth Management Statistics: Wealth management is the collective process of meeting the needs and wishes of prosperous clients by providing appropriate financial services and products. The essential types of wealth management are trusts, funds and financial vehicles, portfolio management, assets management, and investment advice.

Funds involve mutual funds that also act as a tool for investment for wealth management. The different advisory modes are robot-advisory, human advisory, and hybrid, which small companies, medium-sized companies, and large enterprises use. We shall shed more light on Wealth Management Statistics through this article.

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• Assets under management are expected to almost double from US$ 84.9 trillion in 2016 to US$ 87.6 trillion by 2025, and active management is predicted to grow to US$ 87.6 trillion during this period.
• Financial advisory services are likely to be the largest segment, with an estimated volume of US$ 814.20 billion in 2024.
• In the next eight years, real assets and private equity/debt are also expected to more than double in size, as per Wealth Management Statistics.
• Additionally, passive management is forecasted to reach US$ 36.6 trillion by 2025, making up 25% of global assets under management.
• The direct indexing market was valued at US$ 400 billion in 2021 and is expected to grow quickly, reaching US$ 730.5 billion by 2026.
• Worldwide, Assets under Management (AUM) in the wealth management industry are expected to reach US$ 128.90 trillion in 2024.
• The Assets under Management (AUM) in this market are predicted to reach an impressive US$ 67.75 trillion by 2024.
• AUM in the wealth management sector is anticipated to grow at an annual rate of 0.90% from 2024 to 2028, bringing the market volume to US$ 16,490.00 billion by 2028.
• According to the Wealth Management Statistics, global wealth for high-net-worth individuals (HNWIs) grew by 4.7% in 2023, reaching US$ 86.8 trillion.
• Early 2024 data shows that cash holdings have dropped to 25% of total portfolios, down from 34% in January 2023.
• The wealth management market was valued at US$ 2.5 billion in 2022 and is expected to grow to US$ 14.1 billion by 2032, with a compound annual growth rate (CAGR) of 24%.

What is Wealth Management?

Wealth management is a special type of investment service aimed at meeting the needs of wealthy clients. Advisors use a consultative approach to learn about clients’ goals and financial situations. This helps them create personalized plans using a variety of financial products and services.

A complete wealth management strategy usually covers several important areas, including:

• Money Management: Managing investment portfolios to fit clients’ risk levels and financial goals.
• Financial Planning: Creating long-term plans for things like retirement and education funding.
• Investment Advice: Giving recommendations on investment options and market trends.
• Estate Planning: Organizing assets to pass on wealth to heirs while minimizing taxes.
• Accounting and Tax Services: Providing advice on tax-efficient strategies and financial record-keeping.
• Life Insurance: Assessing insurance needs to protect against unexpected events.
• Retirement Planning: Developing plans to ensure financial stability during retirement.

By combining these services, wealth management aims to meet the complex financial needs of wealthy clients and help them effectively reach their financial goals.

Fee structures for comprehensive wealth management services can vary, but they are often based on a client’s assets under management (AUM). This means that fees are usually calculated as a percentage of the total value of the client’s investments.

General Wealth Management Industry Statistics

• The direct indexing market was valued at $400 billion in 2021 and is expected to grow quickly, reaching $730.5 billion by 2026.
• This investment strategy involves directly purchasing the individual stocks in an index according to their correct weights.
• It gives investors more control and flexibility compared to owning a mutual fund or ETF.
• Additionally, it allows for tax-loss harvesting on individual stocks, potentially increasing returns by about 1% each year.
• Wealth Management Statistics predicts that by 2025, there will be $1.5 trillion in direct indexing managed accounts, up from $350 billion in 2020.
• Major companies like Morgan Stanley, BlackRock, Vanguard, Fidelity, and Schwab have recently acquired firms in this space.
• Investors typically need at least $250,000 for Schwab’s direct indexing services, and fees start at 0.40%.
• Fidelity’s direct indexing services, which offer some customization, require a minimum investment of $5,000 and also charge a 0.40% advisor fee.
• As Baby Boomers pass down their wealth to younger generations, many middle-class individuals will soon have substantial funds to invest.
• A consulting firm, Cerulli Associates, estimates that $84 trillion will be transferred by 2045, while The New York Times predicts the amount will be around $15 trillion.
• Surveys show that 80% to 98% of heirs may not stay with their parents’ financial advisors. A 2021 survey revealed that only 38% of wealth managers believe they can meet the unique needs of millennials.
• Younger generations are also willing to seek second opinions, even from technology. A study by Accenture found that 67% of millennials prefer recommendations generated by computers.
• Millennials are twice as likely as Baby Boomers to use robo-advisors, a market expected to reach $1.2 trillion by 2024.
• Wealthsimple is one company offering financial solutions specifically designed for this generation.

(Source: explodingtopics.com)

• The growth of ESG (Environmental, Social, and Governance) assets is a significant trend in the investment landscape and is expected to exceed $53 trillion by 2025.
• Numerous organizations and companies are publishing detailed reports on their ESG initiatives to support informed decision-making.
• The MSCI ESG Ratings, for instance, evaluates nearly 3,000 companies based on criteria like implied temperature rise, decarbonization targets, and labor management practices.

(Source: explodingtopics.com)

• The investment advisory field is changing rapidly. Right now, 44% of registered investment advisors are over 60 years old, while only 11% are younger than 40. This shows a potential gap in meeting the needs of younger investors, who prefer digital solutions.
• UBS has taken a strong step in this direction by speeding up its digital transformation during the pandemic. They invested $2.65 billion in the My Way tool, which enhances investors’ remote experience.
• Additionally, companies that adopt digital strategies have seen great results: a 13% boost in productivity, an 8% increase in assets under management (AUM), and an 8% rise in revenue.

Wealth Management Regional Statistics

• Worldwide, Assets under Management (AUM) in the wealth management industry are expected to reach $128.90 trillion in 2024.
• Financial advisory services are predicted to be the largest segment, with an estimated market volume of $126.10 trillion that year.
• As per Wealth Management Statistics, AUM is projected to grow at an annual rate of 5.34% from 2024 to 2028, reaching $158.70 trillion by 2028. This indicates a positive outlook for the wealth management sector.
• In the United States, there is a growing trend towards sustainable and impact investing in the wealth management market.

Wealth Management -Africa

(Source: statista.com)

• In Africa, the wealth management market is expected to experience significant growth in the coming years.
• The projected Assets under Management (AUM) in this market could reach an impressive $854.20 billion by 2024.
• Financial advisory services are likely to be the largest segment, with an estimated volume of $814.20 billion in 2024.
• Looking forward, AUM in the wealth management sector is expected to grow at a compound annual growth rate (CAGR) of 1.31% from 2024 to 2028.
• This steady increase is predicted to bring the market volume to $899.70 billion by 2028.
• Africa has a lot of potential in this area, offering attractive opportunities for both investors and wealth managers, according to Wealth Management Statistics.
• In South Africa, the wealth management industry is experiencing a growing demand for sustainable investment options.

Wealth Management – United States

(Source: millioninsights.com)

• In the Americas, the wealth management market is expected to grow significantly in the coming years.
• The Assets under Management (AUM) in this market are predicted to reach an impressive $67.75 trillion by 2024.
• Financial advisory services are set to be the largest segment, with an estimated volume of $65.87 trillion in the same year.
• As per Wealth Management Statistics, AUM is expected to grow at a strong annual rate of 7.70% from 2024 to 2028, likely expanding the market to $91.16 trillion by 2028.
• The wealth management sector in the Americas has clear potential for growth and development, showcasing a robust financial environment and increasing demand for professional financial services.
• Additionally, the rising interest in socially responsible investment options is also driving the growth of the wealth management market.

Wealth Management – Asia

(Reference: mordorintelligence.com)

• The wealth management market in Asia is expected to see a significant increase in Assets under Management (AUM) in 2024, reaching an estimated $15,910.00 billion.
• Financial advisory services will be the largest part of this market, with a projected volume of $15,450.00 billion that year.
• Wealth Management Statistics stated that AUM in the wealth management sector is anticipated to grow at an annual rate of 0.90% from 2024 to 2028, bringing the market volume to $16,490.00 billion by 2028.
• In Asia, China’s wealth management market is rapidly expanding due to the growing number of high-net-worth individuals seeking investment options.

Wealth Management-Australia And Oceania

(Source: oliverwyman.com)

• The wealth management market in Australia and Oceania is expected to see significant growth, with projected Assets under Management (AUM) reaching $2,238.00 billion by 2024.
• Financial advisory services are predicted to be the largest part of this market, with an estimated volume of $2,219.00 billion that year.
• Wealth Management Statistics stated that AUM is expected to grow at an annual rate of 1.00% from 2024 to 2028, leading to a market volume of $2,329.00 billion by 2028.
• Australia’s strong economy and the rising number of high-net-worth individuals are increasing the demand for personalized wealth management services.

Wealth Management- Caribbean

• The wealth management market in the Caribbean is expected to reach $66.64 billion in Assets under Management (AUM) in 2024.
• Financial advisory services are predicted to be the largest segment, with an estimated market volume of $63.66 billion that year.
• Wealth Management Statistics stated that the AUM is projected to grow at an annual rate of 1.43% from 2024 to 2028, leading to a market volume of $70.54 billion by 2028.
• The Caribbean’s wealth management market is seeing an increasing demand for offshore investment opportunities because of its appealing tax and regulatory environment.

Wealth Management- Europe

(Source: businessmarketinsights.com)

• In Europe, the wealth management market is expected to grow significantly in the coming years.
• Assets under Management (AUM) are projected to reach an impressive $42,160.00 billion by 2024.
• Financial advisory services are anticipated to be the largest part of this market, with a volume of $41,770.00 billion that year.
• Wealth Management Statistics stated that AUM is expected to grow at a steady annual rate of 3.18% from 2024 to 2028, resulting in a market volume of $47,790.00 billion by 2028.
• The wealth management market in Europe is positioned for considerable expansion. In Switzerland, the industry continues to flourish due to its strong tradition of financial expertise and its stable, secure banking system.

Wealth Management Future Projection

(Source: pwc.com)

• Suppose interest rates remain low around the world, and the economy keeps growing. In that case, we expect assets under management (AuM) to increase from US$84.9 trillion in 2016 to US$111.2 trillion by 2020 and then to US$145.4 trillion by 2025.
• However, the growth will vary; it will be slowest in developed markets and fastest in developing markets.

(Reference: pwc.com)

• Passive investments are projected to capture a larger market share, growing from 17% of assets under management (AuM) in 2016 to 25%.
• At the same time, alternative investments are expected to increase from 12% to 15%. However, active management will still make up 60% of global AuM.

Following are the Total assets in the USD trillion:

• If growth stays on track, the industry’s penetration rate—defined as managed assets compared to total client assets—should rise from 39.6% in 2016 to 42.1% by 2025.
• The wealth management market in India is expected to undergo a major transformation toward digitalization from FY2025 to FY2032.
• With more people using technology and digital platforms, wealth management firms will likely use advanced tools like AI, machine learning, and data analytics to provide personalized and efficient services to their clients.
• During this period, robot advisors are expected to become more popular in India’s wealth management market. These automated investment platforms should attract tech-savvy investors looking for affordable and convenient options for managing their wealth.
• According to Wealth Management Statistics, environmental, social, and governance (ESG) investments are projected to be important in the future of wealth management in India.
• As investors increasingly prioritize sustainability and ethical concerns, wealth management firms are expected to include ESG factors in their investment strategies.
• In the coming years, wealth management firms in India are likely to focus on offering personalized solutions that cater to their clients’ diverse needs.
• Using data-driven insights and advanced technologies, these firms can develop customized investment strategies and financial planning services to meet individual client goals.

Wealth Management Market Segmentation Statistics

The wealth management market is divided to meet the various needs of different client groups:

By Client Type:

• High-Net-Worth Individuals (HNWIs): This group includes people with significant investable assets, usually over $1 million.
• Ultra-High-Net-Worth Individuals (UHNWIs): This even more exclusive group targets individuals with much larger investable assets who often need specialized wealth management strategies.
• Affluent Families: Wealth management firms also assist multigenerational families looking to preserve and grow their wealth over time.

By Service Type:

• Wealth Management Platforms: New digital platforms are being developed that offer
• automated investment management solutions, making it easier for clients to access services.
• Wealth Management Software: Technological advancements are leading to sophisticated software that helps simplify portfolio management, risk assessment, and communication with clients.
• Wealth Management Portfolio Analysis: Wealth managers conduct thorough analyses of client portfolios to identify investment opportunities, optimize asset distribution, and manage risk effectively.

Global High-Net-Worth Population And Wealth Statistics

• According to the Wealth Management Statistics, global wealth for high-net-worth individuals (HNWIs) grew by 4.7% in 2023, reaching $86.8 trillion.
• The HNWI population also rose by 5.1% to 22.8 million worldwide, continuing to increase despite market uncertainties. This upward trend counters last year’s decline and puts HNWI growth back on track, as per Wealth Management Statistics.
• In 2023, North America had the strongest recovery, with wealth increasing by 7.2% and population by 7.1%.

(Reference: statista.com)

Factors like strong economic resilience, easing inflation, and a robust U.S. stock market contributed to this momentum. Other regions also saw growth, but to a lesser extent:

• The Asia-Pacific region grew by 4.2% in wealth and 4.8% in population.
• Europe experienced more modest growth at 3.9% for wealth and 4.0% for population.
• Latin America and the Middle East had limited growth, with wealth increasing by 2.3% and 2.9% and population increasing by 2.7% and 2.1%, respectively.
• According to Wealth Management Statistics, Africa was the only region to see declines, with HNWI wealth down 1.0% and population down 0.1% due to falling commodity prices and reduced foreign investment.
• As the number of HNWIs rises, their asset allocations are shifting from preserving wealth to pursuing growth.
• Early 2024 data shows that cash holdings have dropped to 25% of total portfolios, down from 34% in January 2023.
• Ultra-high-net-worth individuals (UHNWIs) hold over 34% of total HNWI wealth and makeup just over 1% of the HNWI population. They are expected to transfer over $80 trillion in the next two decades.
• This transfer will increase the demand for both financial (like investment management and tax planning) and non-financial services (such as philanthropy and networking), creating a great opportunity for wealth management firms.
• Many HNWIs (65%) are worried about the lack of personalized advice suited to their changing financial situations, as per Wealth Management Statistics.
• Furthermore, more than 65% of HNWIs say that biases affect their investment decisions, especially during major life events like marriage or retirement.
• As a result, 79% want guidance from relationship managers (RMs) to help manage these biases.

Role of Artificial Intelligence In Wealth Management Statistics

• The wealth management market was valued at $2.5 billion in 2022 and is expected to grow to $14.1 billion by 2032, with a compound annual growth rate (CAGR) of 24%.
• Another segment is also predicted to reach $2.5 billion by 2032, growing at a CAGR of 27.9%.
• Furthermore, studies show that 62% of wealth managers are already using AI in their services.

(Reference: devtechnosys.com)

• In 2023, the main advantage of financial planning software was improving operational efficiency.
• Wealth Management Statistics stated that from 2024, 43% of respondents experienced better efficiency thanks to AI, showing a significant increase compared to the previous year.
• While enhancing customer experience was seen as the top benefit of AI in 2022, it dropped to third place in 2024, with only 27% of respondents mentioning improved user experience as the main advantage.
• According to Wealth Management Statistics, nine out of ten financial advisors believe that AI wealth management software can boost their business by over 20%.
• Technology in wealth management has resulted in a 20% reduction in costs, a 30% improvement in user experience through personalized recommendations, and a 50% increase in productivity for wealth managers.
• Additionally, by 2027, AI-powered systems are expected to manage $6 trillion in assets.
• Following are Top 6 Artificial Wealth Management Software:

Cost of Artificial Intelligence in Wealth Management Software

• The cost of AI in wealth management can differ greatly based on several factors, such as the complexity of the application, the specific features needed, and the amount of customization required.
• Here’s a summary of the costs for developing personal finance management apps that use AI skills, divided into simple, standard, and complex programs:

Conclusion

The wealth management industry is experiencing significant changes and disruptions. New types of advice and innovative methods for delivering that advice are emerging, causing shifts in competition—some firms will succeed while others may struggle. Retail investors are likely to benefit from these developments, but wealth management companies need to adapt strategically to keep up with these changes.

Clients now expect firms to manage relationships in new ways. Wealth managers who embrace these changes and offer digital solutions will be in a better position to attract and keep clients. This article has highlighted Wealth Management Statistics related to the wealth management industry that are important to understand.

Saisuman Revankar

Saisuman is a professional content writer specializing in health, law, and space-related articles. Her experience includes designing featured articles for websites and newsletters, as well as conducting detailed research for medical professionals and researchers. Passionate about languages since childhood, Saisuman can read, write, and speak in five different languages. Her love for languages and reading inspired her to pursue a career in writing. Saisuman holds a Master's in Business Administration with a focus on Human Resources and has worked in a Human Resources firm for a year. She was previously associated with a French international company. In addition to writing, Saisuman enjoys traveling and singing classical songs in her leisure time.

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