Financial Advisory - North America

Assets under Management in the Financial Advisory market are projected to reach US$96.44tn in 2024.
Assets under Management are expected to show an annual growth rate (CAGR 2024-2029) of 2.74%, resulting in a market volume of US$110.40tn by 2029.

Definition:

Financial advisory is the process of providing guidance and recommendations to clients regarding their financial decisions. Financial advisors use their expertise and knowledge to help clients make informed decisions about their investments, retirement planning, taxes, insurance, and other financial matters. The Financial Advisory segment encompasses the revenues generated by this service by both financial institutions and advisors, and includes the number of financial advisors, average revenue per advisor, and assets under management (AUM).

Traditional Wealth Management (non-automated wealth management services)
Traditional Investment, incl. Financial Advisors
Banks, Financial Institutions, and Financial Services Companies
B2C & B2B Revenues
Full-Service Products for Insurance, Investing, Lending, and Trading

Commercial Assets or Assets Under Custody
Digital Wealth Management (automated wealth management services)
Digital Investment, incl. Robo-advisors and Neobrokers
Independent Financial Advisory Companies
Independent Financial Advisors (IFAs)
Retail/Non-Professional Investors

The Financial Advisory market in North America is experiencing significant growth and development, driven by changing customer preferences and underlying macroeconomic factors. Customer preferences in the Financial Advisory market have shifted towards personalized and holistic financial advice.

Clients are seeking advisors who can provide comprehensive solutions to their financial needs, including retirement planning, investment management, and tax strategies. This shift is driven by increasing financial complexity and the desire for a more integrated approach to wealth management. In addition, clients are increasingly demanding digital solutions and online access to their financial information, leading to the rise of robo-advisors and online platforms in the market.

One of the key trends in the Financial Advisory market in North America is the increasing adoption of technology and digital solutions. Robo-advisors, which use algorithms to provide automated investment advice, have gained popularity among tech-savvy investors. These platforms offer low-cost and convenient investment options, appealing to a younger generation of investors who are comfortable with technology.

In addition, traditional financial advisory firms are also investing in technology to enhance their service offerings and improve client experience. Another trend in the market is the growing importance of sustainable and socially responsible investing. Clients are increasingly interested in aligning their investments with their values, and are seeking advisors who can provide guidance on responsible investment options.

This trend is driven by a greater awareness of environmental and social issues, as well as the desire to generate positive impact through investments. Financial advisory firms are responding to this demand by integrating ESG (Environmental, Social, and Governance) factors into their investment strategies and offering dedicated sustainable investment options. Local special circumstances in the North American market include a highly competitive landscape and regulatory changes.

The Financial Advisory industry is highly fragmented, with a large number of independent advisors and a few large players dominating the market. This competition is driving firms to differentiate themselves through specialized services, innovative technology, and personalized advice. In addition, regulatory changes, such as the introduction of fiduciary standards, are shaping the market by requiring advisors to act in the best interest of their clients.

Underlying macroeconomic factors that are driving the development of the Financial Advisory market in North America include a growing wealth gap and an aging population. The increasing wealth gap has created a need for financial advice among high-net-worth individuals, who require sophisticated wealth management solutions. At the same time, the aging population is driving demand for retirement planning and estate management services.

These factors are expected to continue driving the growth of the Financial Advisory market in North America in the coming years.

Data coverage:

The data encompasses B2C enterprises. The figures are based on gross revenues, assets under management, and user & advisor data of relevant services and products offered within the Wealth Management market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research activities (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as: GDP, gross national income (GNI), consumer spending, total investment (% of GDP), high income (% of population), and number of high-net-worth individuals (HNWI). This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Private wealth management has developed significantly in recent years as a result of the growth of affluence worldwide. The number of millionaires in North America more than doubled between 2010 and 2022. A similar trend can be observed in the Asia-Pacific and Europe. The total wealth of the adult population in Europe has steadily increased since 2010. Private Wealth Management is an increasingly important service as the rate of wealth continues to increase among the general population and affluent high-net-worth-individuals. Coupled with the recent developments in the Fintech market, this has helped to open up new Private Wealth Management products and services to people with smaller amounts of disposable income and expanding services offered to larger clients.