An average of two-thirds of assets under management is held within advisory accounts, according to a new report.
Ernst & Young LLP, New York, publishes this finding in a study that explores current and emerging trends in wealth management, including risks and challenges that financial professionals face.
Within the high net worth market, 69% of assets under management are held in advisory accounts, versus 31% in commission-based accounts. In the mass market, the percentages are 57% and 43%, respectively, the study reports.
Nearly all (92%) of the wealth management firms Ernst & Young interviewed offer mutual funds, and three in four (73%) offer ETFs. The disparity between ETFs and mutual funds sold, the study says, may reflect the “maturity” of the two markets.
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Two in three (63%) wealth managers offer hedge funds/private equity, and about half offer structured products, the study adds. The demand is greater among those firms targeting high-net-worth clients, and their outlook for asset growth aligns — those targeting high-net worth clients are significantly more optimistic about growth in AUMs for alternative investments than their mass-market counterparts.
Nearly all (95%) wealth management firms offer managed accounts, but just half offer unified managed accounts, the report says.