Assets of Wealthy Fell in 2001

As a result of the fall in assets, profits at wealth management firms also fell, Boston Consulting says. Much of that fall resulted from a drop in trading commission revenues, because wealthy investors are holding their stocks longer than they used to.

Nevertheless, wealth management is expected to be a growth business moving forward. And alternative investing, hedge funds in particularly, was cited as a key part of wealth managers’ strategy for success. Hedge funds fell into the magical category of offering high fees and high growth, besting private equity and consulting wrap fee programs, looking at data from 1997 to 2000. As a result hedge funds can be used to help stabilize and broaden revenues, Boston Consulting says.