The market for financial advice is getting larger and at a faster pace, according to a new report. But what are the drivers?
The Financial Advisory Global Market Report 2024 predicts that the rate of growth will increase from the 4.4% CAGR seen between 2023 and 2024 which has taken the market to almost $216 billion, to 5% by 2028 with a market value of almost $262 billion.
There are some key component of this growth expectation, the ResearchandMarkets.com report highlights. These include the evolving regulatory landscape, ESG investing, retirement planning demand, personalization and customization, and collaboration with fintechs.
Alternative investments are also expected to be a major driver of the financial advisory market growth in the next few years. As interest intensifies, financial advisors will be in demand to help clients navigate the less known and often opaque investments in assets such as hedge funds, private equity, real estate, and commodities. Financial advisors are predicted to be allocating 17.5% of clients’ portfolios to alts by the end of 2024, compared to around 14.5% in 2022 and 10.1% in 2021.
Another important factor in the growth expectations is a larger population of high-net-worth individuals.The U.S. remains dominant in this regard with 37% of the world’s millionaires or around 5.5 million individuals with at least $1 million in liquid assets.
These wealthy people are also expecting to get wealthier. Knight Frank’s annual Wealth Report found that 65% of all global high-net-worth investors expect their wealth to increase in 2024, led by three-quarters of respondents from Gen Z and 69% of millennials.
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