What You Need to Know
- BDs, RIAs and bank/trust firms are most likely to license market-leading vendors.
- The top three applications licensed from external vendors by wealth managers are portfolio accounting, financial planning and tax optimization.
- Large shares of firms licensing tech solutions are looking to switch vendors.
Two thousand wealth management firms controlling roughly $10 trillion in assets under management represent the biggest market opportunity for financial technology firms. That’s according to Cerulli’s latest report, “State of U.S. Wealth Management Technology 2021: Aligning Firm Strategy With Technology Decisions.”
The report notes that the segment of the market most likely to license market-leading vendors consists of broker-dealers (BDs), registered investment advisors (RIAs) and bank/trust firms looking to distinguish themselves to advisors and investors through their tech stack. While these firms are not at scale to do massive internal development like the wirehouses, they are able to utilize and benefit from wealthtech vendors, according to the research.