Wealth Management Platform Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The wealth management platform market was valued at USD 3.67 billion in 2021, and it is expected to reach a value of USD 8.15 billion by 2027, registering a CAGR of 14.56% over the forecast period (2022-2027).

• The robust wealth management platforms offer support to a broad range of digital channels, such as smartphones, tablets, and browsers. This support enables cross-channel experiences, which reduce friction between the customers of a financial institution and the financial advisors, resulting in more efficient operations. Also, the trading and investment management fees are dipping to zero while firms wrestle with decreasing margins. This has led to a requirement for digitizing operations and finding efficiencies elsewhere.
• Customer-centric business priorities, such as fully-digitized client onboarding, goal-based financial planning, and secure, real-time collaboration between the client and the financial advisor, thus, making the wealth management platforms stand out. Some of the platforms offer AI components such as machine learning, natural language processing, and digital process automation to reduce exceptions, making the onboarding process paperless and frictionless.
• As multiple investors seek advice for withstanding the current uncertainty in the investment scenario, fintech companies are launching wealth management platforms that give wealth managers the insights and data they require to understand and serve the needs of multiple clients. For instance, in mid-2020, Fidelity National Information Services Inc. launched FIS Unity, an open Application Programming Interface (API) to assist wealth managers with a complete, integrated view of a client's financial assets across several financial providers.
• Financial institutions have been viewing wealth management as an integrated set of products: cash management, asset management, protection, credit, retirement and estate planning, and tax planning. While a product-centric approach to wealth management is sensible in some respects (because products drive profit), this approach fails to address a large portion of clients’ needs.
• This is a primary reason to integrate various business capabilities for wealth management products, which are roughly equivalent regardless of who offers them. Clients are less interested in product specifics, assuming that they meet certain basic requirements than the service elements surrounding the products.
• One significant challenge for potential entrants is expensive property prices for setting up branch locations. The wealth management model is based on a high-touch client relationship, and, therefore, establishing a physical presence is critical.
• The COVID-19 crisis has impacted wealth management (WM) on multiple levels, and many wealth management firms must adjust their client engagement model substantially to remain the trusted partner for their clients in these challenging times.
  The pandemic forced wealth management business model resiliency by emphasizing intelligent business process investments. Another trend that has accelerated pertains to technologies such as artificial intelligence (AI) to enhance personalization and advisor effectiveness.

Scope of the report

A wealth management platform is an advisor platform that provides a client’s complete wealth overview, financial goal planning, and portfolio management capabilities.

The wealth management platform market is segmented by deployment type (on-premise and cloud), end user (banks, trading firms, brokerage firms, and investment management firms), and geography.

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Key Market Trends

Investment Management Firms are Expected to Drive the Market Growth

• Investment management is the handling of financial assets and other investments by professionals for clients, generally by utilizing strategies and executing trades within a portfolio. The investment management industry has significantly changed over the years due to several advancements, such as digitalization and automation. Low yields and increased volatility have considerably driven portfolio managers to implement sophisticated strategies that are straining their existing infrastructure. The use of derivatives has increased significantly, but most firms have concerns about their ability to handle them.
• In addition, global regulation has become much more pervasive on the buyer side, resulting in the creation of operational and compliance challenges for investment managers. New rules related to reporting, clearing, and margin requirements are pushing firms to revamp their processes and replace legacy systems. All these factors are driving investment management firms to utilize wealth management solutions.
• Multiple wealth management platforms in the market have a command center that provides users with real-time portfolio insights as well as the ability to act immediately. The workstation manages all position and risk data, which ensures that investment managers are working with up-to-date and accurate information.
• For instance, Calypso’s (provider of front-to-back trade processing technology for both derivatives and cash instruments) investment management solution integrates with its multi-asset trading and collateral management platform. The company’s collateral optimization solution provides a single data repository for real-time views of all available and pledged securities, coupled with existing margin calls.
• Multiple startups are receiving significant funding for the development of investment management platforms. For instance, in December 2020, Vise, an AI-powered investment management platform for advisory practices to build and manage portfolios, announced the close of its USD 45 million Series B funding round, bringing the total capital raised since Vise's founding to over USD 60 million.

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