KBS - Financial Services and Wealth Management - Market Insight

MARKET INSIGHT

• Assets under management (AUM) in the wealth management market are projected to reach $168.2tn in 2025 worldwide. Financial advisory firms dominate the market with a projected market volume of $165.1tn.

• AUM are expected to show an annual growth rate (CAGR 2025-2029) of 1.94%, resulting in a market volume of $181.6tn by 2029.

• This sector can be split into Financial Advisory and Digital Investment. Advisory includes traditional services, whereas digital investment covers automated investment services and online trading services.

• Technology has been a catalyst for change in this market, with GenAI, ‘big data’ and blockchain propelling shifts in the methods by which services are offered and in the service offerings - e.g. robo-investors - themselves. Direct-to-consumer platforms for tech-savvy individuals have gained popularity. For example, Hargreaves Lansdown has expanded its offering to personal advice and digital wealth management. Nutmeg, which offers automated algorithm-based portfolios, has gained market share with over £3.5bn AUM and was acquired by JPMorganChase in 2021. More established banks are following this market trend by launching their own apps/digital advice services to retain their customer base and not be left behind, e.g. Schroders Personal Wealth (Lloyds). • Regulation highlights these shifts in the market, creating more stringent rules focusing on customer safety - in the EU, the Retail Investment Strategy was introduced to enhance investor protection; in the US, Securities and Exchange Commission’s updated cyber security disclosure rules; and the UK implemented The Consumer Duty. • Consolidations are reshaping the current landscape of the wealth management industry. Private equity and large firms have continued to acquire. For example, BlackRock conducted a $12.5bn cash and share deal with Global Infrastructure Partners. Wendel Group made a strategic entrance in 2024 with its acquisition of IK Partners, further aligning with the broader trend of major firms diversifying their portfolios and bolstering their capabilities. Many international players are looking to gain foothold in the UK market. This can be seen with RBC (Royal Bank of Canada) acquiring Brewin Dolphin for £1.6bn.

Assets under management (AUM) in the wealth management market are projected to reach $168.2tn in 2025 worldwide. Financial advisory firms dominate the market with a projected market volume of $165.1tn