Although advisory and discretionary asset management services are more profitable to wealth managers, they cannot afford to ignore the needs of clients who self-direct. Globally over a quarter of HNW wealth is invested independently of wealth managers’ mandates. Furthermore, a large chunk of assets already brought to wealth managers sits within execution-only platforms. Technological and regulatory changes in the financial services industry have affected the drivers for investors to self-direct in recent years. Understanding these factors is crucial to ensure the long-term profitability of wealth managers’ business.
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– Globally execution-only mandates constitute 19.1% of total HNW assets held with wealth managers. Although clients in developing economies tend to prefer unadvised services, the US represents the biggest market opportunity in terms of self-invested assets.
– HNW clients under 35 years old and first-generation entrepreneurs are most likely to self-direct their investments.
– Price-sensitivity encourages HNW investors to look for alternatives to the services of wealth managers in mature economies, but in developing markets a pure preference to run simple portfolios independently is the key driver.
– Advances in digital technology are contributing to the growing interest in DIY investments, particularly in Asia Pacific.
– Traditional brokerage business models are being challenged by the growing number of platforms offering automated investment solutions (robo-advisors).
– The increasing popularity of exchange-traded funds (ETFs) and peer-to-peer (P2P) lending platforms has started to affect the business of wealth managers.
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This report draws on our 2015 Global Wealth Managers Survey to analyze the independent HNW investors’ landscape across the globe. It sizes the market for self-directed investments and examines the key drivers behind wealthy individuals’ decision to build their portfolios without professional advice. The competitive landscape and product environment are also analyzed. Specifically, the report:
– Estimates the value of HNW and mass affluent assets invested outside discretionary and advisory mandates
– Analyzes the demographics of DIY investors
– Compares drivers for self-directed investments between developed and emerged economies
– Examines client targeting strategies of brokerages and robo-advisors
– Identifies what investment products are preferred by self-directed HNW clients and how wealth managers can use them to expand their offerings
Reasons To Buy
– Discover how much HNW wealth is invested independently from wealth managers
– Learn why HNW investors choose to self-direct, and how their motivations differ from those of mass affluent individuals
– Gain an insight into best practice examples from competitors operating within the self-directed landscape
– Understand how the rise of robo-advisors and the growing popularity of ETFs and P2P lending affects the wider wealth management industry
Place a purchase order of this report @ http://www.orbisresearch.com/contact/purchase/129333 .
Bank of America Merrill Lynch
National Australia Bank
Self-directed investors remain a lucrative target group for wealth managers
Critical success factors
SIZING THE GLOBAL MARKET FOR SELF-DIRECTED INVESTMENT
Defining the self-directed investment market
Globally execution-only mandates constitute 19.1% of total HNW assets held with wealth managers
HNW clients in Central and Eastern Europe have the strongest inclination to use execution-only services
Among developed markets, execution-only platforms are popular particularly in France
Over a quarter of global HNW wealth is invested independently of wealth managers
Users of execution-only mandates are also likely to self-direct through third-party services
The HNW self-directed market is largest in the US and China
The US HNW self-directed market alone is worth $2.6tn
Demand for execution-only services will grow, but will be outstripped by advised services
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