Individual investors will drive the future of asset management. In 2014, individual investors represented 90 percent of the industry’s net new flows, but will account for nearly 120 percent by 2020. According to a new report from Casey Quirk, organic growth in the asset management will shrink below 2 percent by 2020. The slowdown is due, in part, to the 20 percent increase in asset managers in the space, greater competition and intensifying fee compression. The management consultant found that competition has reduced fees by 8 percent since 2012. Wealth managers, banks and insurers secured 75 percent of new wealth created since year-end 2012 while less than half of asset managers are gathering new assets.
Female independent advisors are more likely to see their daughters take after them than their male counterparts. At least that’s the conclusion of a new study by Francis J. Greene of the University of Warwick in the United Kingdom, which found that the daughters of women who were self-employed are up to 2.69 times more likely than other women to become self-employed themselves. At the same time, men who were self-employed had no effect on their daughters' self employment later in life, the researcher found.
Advisors using the Black Diamond wealth management platform can now see a more complete picture of their clients’ net worth with a new data aggregation and reporting service from Quovo. Advisors will have access to a client's credit card debt, checking and savings accounts, student loan debt and mortgages. However, these capabilities may become limited over the coming months, as banks become increasingly wary of letting their data flow to third party aggregators. Last week, Bank of America joined J.P. Morgan Chase and Wells Fargo as the latest bank to cut off access to its data.
Lack of family communication is one of the biggest obstacles for growing wealth among high-net-worth families, according to a recent report from SEI Private Wealth Management. The report, Breaking the Taboo, says that working through financial decisions alone or failing to communicate effectively can disintegrate a family's wealth. Instead, wealth managers need to help families engage in conversations about money more regularly and get heirs involved in the decision-making process at a younger age. About 80 percent of respondents to the survey said their heirs do not know how much they received, and only 20 percent have given their children training or education on wealth management. “This means people are learning not only the basics of what they can spend and what they have, but also learning the relation between money and their family’s values,” said Jeff Ladouceur, Director, SEI Private Wealth Management. “Therefore, educated decisions are made not on affordability but on alignment with need and values.”