Wealth and asset firms expect US recession, weakened industry growth

Wealth and asset firms expect US recession, weakened industry growth
Dual-industry surveys reveal some big challenges ahead.
AUG 21, 2023

A dual survey of U.S. wealth management and asset management professionals shows a strong expectation of recession in the coming months.

Asset managers have a higher level of certainty of recession (72%) than wealth managers (62%) but both groups expect industry growth to be weakened to a conservative 5-8% over the next 12 months (again asset managers more so than wealth managers) compared to a more typical 8-10%.

But economic and industry growth is not the only concern among these financial services professionals, with the ongoing battle for the best talent also providing challenges for firms according to around two thirds of those polled by advisory and accounting firm Wipfli LLP, which sold its financial advisors business a year ago.

Client acquisition

Wealth managers are more focused on new client acquisition and deepening those relationships.

But those firms are not reporting changes to their client acquisition strategies and are also lagging on talent management with many requiring employees to be in the office 5 days a week.

"Wealth management firms need to focus on targeted strategies that will help them foster long-term stability and viability," said Paul Lally, wealth and asset management industry leader, principal at Wipfli. "In today's uncertain economy, it's critical for firms to adapt and constantly reassess their growth strategies."

Wipfli suggests that wealth managers consider how workplace flexibility and benefits can enhance the new talent pipeline and ensure that their strategies for growth are aligned.

Technology for growth

Asset managers’ focus on technology is one of the keys to their growth with three quarters of respondents citing "managing and implementing change" as the top factor driving their goal achievement.

This group is also embracing the potential of artificial intelligence and 88% are using business analytics to support data-driven decisions compared to 56% of wealth managers.   

"Asset management firms recognize the important role technology will need to play due to the ever-increasing complexity of investment opportunities and client demands." said Ron Niemaszyk, partner for Wipfli's wealth and asset management practice. "New and older generations of clients are increasingly comfortable with technology and expect firms to provide a level of reporting on metrics well beyond that of monthly returns.  Investors are now looking for insights into their portfolios' risks and exposure to ESG initiatives. Firms who begin offering this type of reporting now can establish an edge in client acquisition over less progressive competitors."

The full reports are available at wipfli.com

Latest News

Retirement delays, Social Security fears prompt advisors to rethink income strategies
Retirement delays, Social Security fears prompt advisors to rethink income strategies

Concerns about outliving savings and healthcare costs are reshaping how "Peak 65" Americans and advisors approach income planning.

Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity
Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity

Some investors recently have seen million dollar plus decisions by FINRA arbitration panels involving complex products decisions go their way.

Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler
Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler

Former advisor Isaiah Williams allegedly used the stolen funds from ex-Dolphins defensive safety Reshad Jones for numerous personal expenses, according to police and court records.

RIA moves: Modern Wealth tops $8.5B AUM as Aspen expands in Connecticut
RIA moves: Modern Wealth tops $8.5B AUM as Aspen expands in Connecticut

Modern Wealth's latest deal for a California-based fee-only RIA marks its fourth acquisition of 2025.

Empower defends private market access in 401(k)s in response to Warren scrutiny
Empower defends private market access in 401(k)s in response to Warren scrutiny

Sen. Warren has warned of private market investment risks due to opacity, illiquidity, and past regulatory issues.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.