Financial Advisory - United States

Assets under Management in the Financial Advisory market are projected to reach US$86.63tn in 2024.
Assets under Management are expected to show an annual growth rate (CAGR 2024-2029) of 2.78%, resulting in a market volume of US$99.37tn 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 United States has experienced significant growth in recent years, driven by changing customer preferences and market trends.

Customer preferences: Customers in the United States are increasingly seeking professional financial advice to help them navigate complex investment decisions and plan for their financial future. With the increasing complexity of financial products and investment options, individuals are turning to financial advisors to provide personalized guidance and expertise. Additionally, the growing awareness of the importance of retirement planning and wealth management has further fueled the demand for financial advisory services.

Trends in the market: One of the key trends in the Financial Advisory market in United States is the shift towards fee-based advisory services. Traditionally, financial advisors were compensated through commissions on the sale of financial products. However, there has been a growing concern about potential conflicts of interest arising from this compensation structure. As a result, many advisors are transitioning to a fee-based model, where they charge clients a fee based on the assets under management or a fixed fee for financial planning services. This trend is driven by the desire to align the interests of advisors with those of their clients and provide unbiased advice. Another trend in the market is the increasing adoption of technology in financial advisory services. Robo-advisors, which are automated investment platforms that use algorithms to provide investment advice, have gained popularity in recent years. These platforms offer low-cost investment solutions and appeal to younger investors who are comfortable with technology and prefer a digital-first approach. Traditional financial advisory firms have also embraced technology by incorporating digital tools and platforms into their services to enhance the customer experience and streamline operations.

Local special circumstances: The United States has a well-developed financial services industry, with a wide range of financial institutions and advisors operating in the market. This competitive landscape has led to a focus on differentiation and specialization among financial advisory firms. Many firms are targeting niche markets or specific client segments, such as high-net-worth individuals or retirees, to differentiate themselves and provide tailored services that meet the unique needs of these clients.

Underlying macroeconomic factors: The overall growth in the Financial Advisory market in United States can also be attributed to favorable macroeconomic factors. The strong performance of the stock market and the overall growth of the economy have increased the wealth and disposable income of individuals, driving the demand for financial advisory services. Additionally, the aging population and the transfer of wealth from older generations to younger generations have created opportunities for financial advisors to provide succession planning and wealth transfer services. In conclusion, the Financial Advisory market in United States is experiencing growth due to changing customer preferences, such as the demand for personalized advice and the shift towards fee-based services. The adoption of technology and the focus on specialization are also shaping the market. Favorable macroeconomic factors, such as the strong economy and the transfer of wealth, further contribute to the growth of the market.

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.