By Hal M. Bundrick
NEW YORK ( MainStreet)--After gradually re-building their practices following the 2008 collapse, financial advisors will have little time to catch their breath. With slower industry growth and slimmer profit margins predicted for the next ten years, advisors will face greater challenges to maintain their profit momentum.
The business of wealth management grew by 7.8% in 2012 to a total of $135.5 trillion, according to a report by The Boston Consulting Group called "Maintaining Momentum In a Complex World: Global Wealth 2013."
"The global wealth-management industry has become increasingly complex," said Brent Beardsley, a co-author of the report. "With the mature economies of the 'old world' and the developing economies of the 'new world' moving at different speeds, wealth managers in different regions are grappling with tough sets of problems. Diverse strategies will be required to succeed on either side of the divide."The research firm says several trends are shaping the industry for the future, including the rising wealth creation and profit pools of developing countries, the decline of traditional value propositions and increasing practice expenses due to tighter regulation. The analysis lists the tactics advisors will need to master in a transitioning industry:
- Exploiting high‐growth markets and capturing high-net-worth client segments
- Offering specific service-model value propositions and "embracing client centricity"
- Streamlining operations and building lean front-to-back office business processes