Financial advisory sector revenue will grow to $200 billion by 2030 from $57 billion today, according to a white paper published Wednesday by Zoe Financial, whose algorithm facilitates matches between investors and fee-only financial advisors.
The paper, written by Zoe Financial’s founder and CEO, Andres Garcia-Amaya, explains how several factors are coming together to drive major industry change that will provide both opportunities and risk for advisors.
“Digitization and automation are transforming every industry, and there’s a huge opportunity for financial advisors who will adapt to this new paradigm,” according to Garcia-Amaya, who was an executive director at JPMorgan Chase before founding Zoe in 2017.
Zoe Financial’s forecast of $200 billion in industry revenue in 10 years indicates much faster growth than other estimates of the U.S. wealth management market. The white paper cites a report by IBISWorld, which estimated that total financial planning revenue would grow at a 7% annualized rate and reach $80 billion by 2024.
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But Zoe’s own research, the paper says, points to a more rapid annualized growth rate closer to 12% because of broader access to new clients.
According to the paper, now-digital-savvy baby boomers are seeking a wealth management experience tailored to the specific circumstances of their retirement and their expectations of hassle-free service.
Boomers, now 75 million strong, currently account for nearly 60% of wealth in the U.S., up from 21% in 1990 when they reached a median age of 35, according to the paper. By comparison, Gen Xers collectively owned 9% of the nation’s wealth when they reached age 35.
Boomers are not wealthy simply because they had more time to accumulate savings, the paper notes; they are the wealthiest generation in the modern era, the paper says.