Financial Planners & Investment Advisers
Companies in this industry provide customized investment advice and financial planning services. Major companies include US-based Ameriprise Financial and AXA Financial (a subsidiary of France's AXA), as well as AMP Limited (Australia), IGM Financial (Canada), and units of diversified financial services companies such as Morgan Stanley (US).
The value of assets under management (AuM) worldwide, an indicator of demand for financial planning and investment advice services, is about $85 trillion, according to PricewaterhouseCoopers (PwC). Global AuM is forecast to exceed $145 trillion by 2025, a growth rate of 6.2% per year, with stronger performances in Latin America and Asia/Pacific. In North America AuM is predicted to grow at a compound annual rate of 5.7% through 2020 to more than $49 trillion (from a 2012 total of $33.2 trillion), exceeding expected AuM for Europe, Asia/Pacific, the Middle East, and Africa combined.
The US industry includes about 23,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $40 billion.
Aging populations, the shift to defined contribution retirement savings plans, and frothy markets in recent years are fueling growth of assets under management and demand for investment advice. Competing with independent financial planners and investment advisers for clients are Wall Street brokerage firms switching from a sales business model to a fee-for-service business model on retirement accounts, as well as CPAs with Certified Financial Planner designations. The proliferation of free online tools (sometimes called robo advisers) is proving popular among cost-conscious investors. As investors become more comfortable with digital financial advice, some 200-plus providers of digital advice in the financial planning profession in the US are predicted to manage $7 trillion in assets by 2025, according to Deloitte's Global CIO Survey.
The profitability of individual firms depends largely on effective marketing. Large companies have some advantages in providing expertise in a wider range of investment options, and they may be able to charge lower fees. Small companies can compete successfully by providing better service and advice. The US industry is concentrated: the 50 largest companies account for about 55% of industry revenue.
Products, Operations & Technology
The relationships between financial planners, investment advisers, and other professionals in the financial services industry are complex, and their roles
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms