BISA Magazine - Quarter 4, 2017 - 4

UP FRONT

The Democratization of
Wealth Management
New research shows that more people today have access to
high-end financial management
By Andrew Singer

I

f you were part of the mass market customer segment in 2011,
you probably only had access to
a single asset management style
when investing. Asset management styles are the general investing
theory that an individual or company
uses. Today, almost half (48 percent) of
the mass market segment has access to
three or more asset management styles.
In 2011, only 13 percent of investors
in the mass-affluent customer segment
had access to 5-7 asset management
styles. In 2017, that percentage had
grown to 43 percent. Wealth management options once only accessible by
high-net-worth (HNW) or ultra-highnet-worth investors are now available
to a broad range of Americans.
"Asset management advice, once only
available to private clients, is being
democratized," notes the Aite Group in
a recent research report on the number
of asset management styles used from
2011-2017. In short, the research shows
that wealth management is for everyone, not just the biggest investors.
"How financial advisors operate is
slowly shifting in terms of how they
use products, generate revenue and
manage client assets," writes Bill Butterfield, a senior analyst at Aite Group.
"These shifts are driven by regulation
and technological innovation, and firms
entrenched in the U.S. wealth management space, from banks to technology
vendors, must understand these shifts
in the context of the disruption occurring throughout the industry."

4
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Number of Asset Management Styles Used by
Advisors Across Wealth Segments (2011-2017)
Source: Aite Group
Average

2011 mass-market segment (n=173)
2017 mass-market segment (n=33)
2011 mass-affluent segment (n=164)
2017 mass-affluent segment (n=93)
2011 HNW segment (n=71)
2017 HNW segment (n=145)
2011 UHNW segment (n=29)
2017 UHNW segment (n=34)

◾ Only 1 style used

◾ 2 used

51%
30%

21%
21%

34%

23%

20% 11%

26%

32%

27%

14% 8% 21%
17% 10%14%
24%

15% 13%

2.2

30%

3.2

18%

6%

◾ 3 to 4 used

30%

13%

25%

2.6
3.7

43%
15%

2.6

57%

4.3

59%

4.4
4.5

68%

◾ 5 to 7 used

The Aite Group's 57-page Impact Report was based on surveys of 300-450 U.S.
financial advisors in 2011 and 2017. It analyzes investment products and asset
management styles across a broad sample of U.S.-based financial advisors, representing
all major full-service brokerage segments and the independent registered investment
advisor (RIA) segment.

"How financial advisors operate is
slowly shifting in terms of how they
use products, generate revenue and
manage client assets."
- Bill Butterfield, Aite Group
http://www.bisanet.org
Table of Contents for the Digital Edition of BISA Magazine - Quarter 4, 2017
