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Five Trends That Will Reshape Wealth Management in 2023


18 min read

The success of the wealth management sector is based on direct human contact. When dealing with high-net-worth clients, wealth managers must go beyond basic financial knowledge to truly empathize with their client’s unique situations and goals. To keep pace with today’s fast-paced world, wealth managers need to embrace innovative technologies and concepts that foster personal connections.

Over the past few decades, the sector has expanded along with the global economy. Wealth managers have successfully evolved and weathered every financial crisis. The global spread of COVID-19 has impacted every organization on the planet and created its own set of obstacles, leaving only the strongest and most flexible to come through unscathed.

Thanks to advances in artificial intelligence, cloud computing, and smart automation models, wealth managers can expand their operations without negatively impacting the quality of service they provide to their existing clients. What it means to be a wealth management firm in today’s world will change in response to issues such as remote work, the increased use of artificial intelligence, RegTech, changing demographics, and the drive to tap into new niche markets. What form will this potential future take in 2023?

Understanding Wealth Management

Money management and investment strategy are two components of wealth management. If you look at the top 10 wealth management companies, It includes not only financial management but also retirement planning, inheritance taxes, and estate preparation.

Most importantly, wealth management gives clients a single point of contact for all of their investment and advice needs. This helps them make the best and most tax-efficient financial decisions at any time in their lives.

Typical wealth management services include:

  • Accounting services
  • Charitable giving plans
  • Education planning
  • Estate planning
  • Insurance advice
  • Investment advice
  • Retirement planning
  • Risk mitigation
  • Stock options planning and advice
  • Tax services (including tax efficiency services)

The best audience for wealth management services are those who already have a lot of money and whose families have complex financial planning and management needs.

Let’s make the wealth management industry overview. Wealth managers are financial experts who take care of all the financial needs of their clients for a fixed fee. Fees vary a lot between firms and even between accounts at the same firm, but on average, they are about 1% of the assets being managed.

To serve their clients efficiently, wealth management firms often follow one of two paths: either collaborative or single office.

Collaborative: With the help of various client advisors (insurance, legal, tax, and other planning professionals), a wealth management company or CFP manages a household’s financial planning and investment management.

Single office: These units, often known as “family offices” in large financial institutions and brokerage houses, provide clients with access to specialists in all aspects of wealth management. This allows individuals and families to receive all their wealth management services from one company.

How the Wealth Management Works

The wealth management process consists of five distinct stages.

Data Gathering

First, the wealth manager meets with the client to discuss their values, goals, and top priorities. They try to establish a timeframe for the client’s short- and long-term goals. Managers are also tasked with assessing the client’s appetite for risk. Digitalization has brought Big Data benefits into this stage which is a smarter approach to data gathering.


The data collected at this stage is cleaned and analyzed. Based on the results of the analysis, a strategy is developed to meet the full range of the client’s financial needs in accordance with their attitude toward risk. Artificial Intelligence is a big step forward for the wealth management domain and helps to analyze risks better.


The client is shown all the proposals developed in the course of the analysis. At this stage, the client evaluates the proposed solutions and, if necessary, requests changes before giving final approval. It is the responsibility of the asset manager to ensure that the client fully understands all aspects of the proposal.


Effective financial management is the most important step. Wealth managers are required to take the initiative to effectively implement their clients’ proposals so that their clients can realize their goals.

Ongoing Communication

The results of the implementation process are checked often, and any changes to the budget that are needed are made as soon as they become clear.

Benefits of Launching Wealth Management Services

The sector has seen a huge surge in invention and experimentation, and lots of financial planning trends. In addition, it must confront ongoing demographic changes that will alter the distribution of wealth. Future growth patterns will be determined by a number of factors. These three ideas stand out most clearly to us: fast-growing markets, new consumer demands, and innovative services.

Fast-Growth Markets

US wealth management market size is huge. There are three subgroups of investors whose numbers are expected to grow significantly and steadily in the coming years: women, active first-time investors, and so-called hybrid affluent investors.

Women investors will dominate the market over the next decade. One-third of the $12 trillion in investment assets currently held by U.S. households are managed by women. This share will grow over the next decade. It is projected that by 2030, American women will control the majority of the baby boomers $30 trillion in investment assets, which could be equivalent to the entire GDP of the United States. In addition, young, affluent women are becoming increasingly financially literate; for example, 30% more married women are making financial and investment choices than they did just five years ago.

Interested investors are creating new accounts in large numbers. One of the most notable changes in the market is the return of the active investor. Since the beginning of 2020, more than 25 million new direct brokerage accounts have been registered, with many of these accounts being opened by first-time investors. High savings rates and other pandemic-related phenomena, combined with pre-pandemic market advances (e.g., low or no online trading fees), have fueled this expansion (due to lower consumption).

Differentiation opportunities exist among hybrid-affluent investors. The expansion of the hybrid investor segment—those with at least one self-directed account and a conventional advisor—has been overlooked amid media attention to the growing number of young first-time investors who tend to have modest assets. In 2021, hybrid investors will account for 31% of high-net-worth individuals, an increase of 9% over three years. Affluent families in this study were defined as families with more than $250,000 in wealth but less than $2 million in investment assets. Existing and emerging direct brokerage firms, as well as some traditional wealth managers with significant direct brokerage platforms, have benefited most from this trend.

Driven by two trends that remain constant—investors’ preference for personalized advice and the availability and low cost of direct investing—high-net-worth hybrid investors have been growing rapidly in recent years. As a result, wealth managers of all stripes must provide direct brokerage and advisor-led services, ensuring seamless integration between the two to build strong connections with affluent clients and not drive them away from investing elsewhere. This won’t be easy since there may be conflicts between channels, and a loss of revenue may occur.

New Consumer Demands

Today, it is important for financial institutions to meet the wealth management trends 2023 and the needs of investors by providing omnichannel access, integrating banking and wealth management services, and tailoring their products and services to the needs of each individual client. With other service providers offering similar benefits, capitalists no longer consider them a luxury but rather a necessity. Fifty percent of ultra-high-net-worth (ultra-HNW) and high-net-worth (HNW) clients agree that their primary wealth manager should improve all of their digital services.

Multichannel access is no longer a luxury. One of the most obvious changes brought by the epidemic is the rapid growth in the use of digital technology among all categories of consumers, including affluent and older clients who were previously less tech-oriented when it came to financial advice. As a result, digital technology is now the most popular channel for clients, with remote advice coming in second, according to the latest McKinsey survey of affluent and high-net-worth consumers.

About 40% of affluent clients say that phone or video conferencing is their favorite wealth management channel, and only 15% look forward to returning to branches or resuming in-person visits; this trend is even more pronounced for the HNW segment, which are defined as households with more than $2 million in investable assets. Interestingly, HNWs are more likely to prefer digital and remote engagement than other affluent clients.

Mergers and acquisitions of financial institutions are becoming commonplace. The percentage of customers who prefer to combine their banking and financial ties for convenience and better partnership conditions has increased dramatically over the past three years, from 13% in 2018 to 22% in 2021. This trend applies to both affluent and young families. 53 percent of respondents under the age of 45 and 30 percent of those with $5 million to $10 million in investment assets are more likely to consolidate.

Both banks and asset managers benefit from this trend, but each has different starting points depending on the clientele they serve. HNW, ultra-HNW, and older clients are more likely to consolidate banking services with their primary asset manager, while younger investors are more likely to do the opposite.

The reasons why clients want to consolidate their banking and financial needs with one institution can vary. The three main drivers of consolidation are lower management costs, higher yields on deposits, and simplified transactions between accounts; however, these benefits are only expected. Also, our research shows that investment firms tend to benefit from their products and reputation, while banks tend to benefit from their convenience (e.g., existing client relationships, services for younger clients), more advanced accounts or products (like securities lending), concierge services for older clients, and recommendations.

The recent surge in the popularity of integrated banking and investment services has been driven by a wave of technological advancements. Often in cooperation with fintech companies, national banks are expanding their wealth management offerings and integrating them more deeply with standard banking services. To better serve their clients, wealth management companies that provide a wide range of services are investing in innovative digital banking infrastructure. Also, millions of people use consumer-focused financial technologies that make it hard to tell the difference between investing and managing money.

Investment strategies that are tailored to each individual are growing in popularity. It is important to tailor your experience to your specific needs. This is the third most important aspect for clients to consider when choosing a financial advisor. The need for customized investment management has prompted wealth managers to create managed accounts that can be tailored to each client’s needs, as well as make them tax-friendly. These services have traditionally been available exclusively to the HNW and ultra-HNW sectors due to the complexity of their transactions. The paradigm is shifting with developments such as direct indexing, fractional share trading, and zero commission online, which allow for customized portfolios with lower entry requirements.

In 2018–2020, direct indexed AUM increased to $215 billion, representing 17% of the SMA retail market. Given the growing need for tax-efficient investments and the desire of some retail investors, especially younger clients, to ensure that their portfolio assets reflect their own beliefs, we expect direct indexing to quadruple by 2025. Recent mergers and acquisitions between the biggest companies in the U.S. wealth and asset management industries will help the direct indexing market grow.

Additional innovations are needed to attract more clients. Direct indexing requires a careful assessment of the trade-offs related to taxation and environmental, social, and governance (ESG) constraints for both self-directed and adviser-managed plans. The advisor’s desktop and workflow will benefit from the introduction of user-friendly interfaces and analytical tools that will result from all of this.

Innovative Services

The introduction of new products and trends in wealth management causes seismic shifts in every market they enter. We believe two main types of innovative wealth management products have great potential: private market investments and digital asset investments.

Liberalization of the commercial sector. As interest rates are expected to remain low for an extended period of time, investors of all ages are looking for alternative investments. However, people between the ages of 25 and 44 show the greatest interest in this area. Private markets, once the domain of large financial institutions, are increasingly being included in private investors’ portfolios. With the support of fintech infrastructure providers, large companies operating in private markets are expanding their retail distribution capabilities and vehicles, and home offices are making it easier for clients to access products sold on private markets. The share of assets invested in private markets is expected to grow from around 2% in 2020 to 3-5% by 2025, representing an increase in assets of between $500 billion and $1.3 trillion, driven by rising consumer demand and innovation. Asset managers are playing an important role in driving this growth by facilitating their clients’ access to private markets.

Mainstream digital assets. The influx of small investors has played an important role in the maturation of asset classes that were previously marginalized. In no other industry is this trend more evident than in digital assets, whose market value has grown from $100 billion in 2019 to more than $2.5 trillion today. Tokens include not only cryptocurrencies but also tokenized stocks, bonds, debentures, stablecoins (usually pegged to traditional currencies), art, and collectibles. Research, speculation, hedging against inflation, or gaining access to the building blocks of a new technology that has been heralded as the next version of the internet are just some of the reasons why people invest in digital assets (i.e., Web3). Be that as it may, the fact that investors have embraced digital assets with such enthusiasm is beyond question. Coinbase, a digital currency trading website, has a whopping 68 million verified users.

Investment managers face financial planning industry trends, dual opportunities and challenges when it comes to digital assets. A significant portion of high net worth (HNW) investors (8%) and affluent investors (11%) have already decided to enter the bitcoin market. However, there are three main obstacles to the adoption of cryptocurrency payments. First, regulatory uncertainty persists, which often exposes wealth managers to an uncomfortably high level of risk. This is especially true for asset categorization and tax reporting. Although it is still too early to say that cryptocurrency exchange-traded funds (ETFs) may one day help solve these problems. Second, conventional investment products do not require the same infrastructure as digital assets, such as custodial services. Finally, many advisors lack in-depth knowledge of digital asset classes, making it difficult to provide sound advice on related issues.

Asset managers can choose a wait-and-see strategy and risk their business by not entering a rapidly growing industry, or they can seize the opportunity by leveraging relationships with fintech companies and coping with increasing regulatory requirements. It is now known that the technologies underlying blockchain-based decentralized finance (DeFi) have the potential to transform the distribution of investment goods, including the T+0 settlement cycle, in the long term.

The wealth management industry is evolving at lightning speed. Things are changing because of new markets, new tools, and a new generation of financial advisors. Uncertainty is also caused by money changing hands and by investors who want more control over their assets through apps and automation.

We believe that these five wealth management trends we have identified will have a significant impact on the future of investing, not only in 2023 but over the next decade, and how wealth is managed.

Customization with Direct Indexing

Investors’ need for individualized strategies to grow their funds is one of the most significant trends in the field of capital management. Direct indexing is one of the approaches that allow this to happen and one of current trends in wealth management.

In 2021, the direct indexing market was valued at $400 billion, and it is expected to expand to $730.5 billion by 2026, which is phenomenal growth. In this way of investing, you buy shares in the right amounts that are part of the index. Compared to buying shares in a mutual fund or ETF, this gives the investor more freedom and flexibility. Also, it lets shareholders reduce their tax losses on some assets, which can increase their annual returns.

With the rise of commission-free equity trading platforms, direct indexing no longer has the high costs that come with it. Because of this, more and more brokerage firms are starting to offer direct indexing services.

According to one study, by 2025, the volume of managed accounts with direct indexation could reach $1.5 trillion. For comparison, in 2020, this figure was $350 billion. In the past 24 months, several large financial companies have bought direct indexing businesses. These companies include Morgan Stanley, BlackRock, Vanguard, Fidelity, and Schwab and the top 10 wealth management firms in US.

The Next Generation Will Need New Approaches

The largest intergenerational transfer of wealth in history will take place over the next few decades and will become one of the biggest digital wealth management trends. Because of what the baby boomers left behind, many middle-class people may soon be able to make a lot of money. Over the next 25 years, $68 trillion will be passed from one generation to the next, though the New York Times says that the real amount of money that will be moved around will be closer to $15 trillion.

How will today’s youth choose to invest their money? While opinions vary, most agree that their approach will be significantly different from that of their parents. A recent study found that between 80% and 98% of heirs end up not using the financial advisor that their parents had.

In a survey done in 2021, only 38% of wealth managers said they knew and could meet the special needs of millennial investors. Young people today don’t think twice about going to an objective third party, like a computer, for a second opinion. Accenture found that the majority of millennials (67%) are interested in having their money managed by algorithms.

The millennial generation is twice as likely as the baby boomer generation to use robo-advisors, a sector that is projected to reach $1.2 trillion by 2024.

Sustainable Investing

In today’s financial market, investors are looking beyond profitability when deciding where to invest their money. They also consider ESG (environmental, social, and governance) criteria, so this becomes one of important financial advisor trends.

Maximizing profit while also serving the public good is the goal of sustainable investing. Investors in this category, for example, stay away from oil and gas companies in favor of those operating in the renewable energy sector.

In 2018, $12 trillion of US assets were invested in accordance with the principles of sustainable development. In 2020, this figure will increase to $17.1 trillion, which is 42% more than in the previous decade ($9.1 trillion). By 2025, it is expected that ESG assets will be worth more than $53 trillion around the world.

According to Reuters, in 2021, investors invested $649 billion in funds with a focus on environmental, social, and governance considerations. This was more than in 2020, when $542 billion was projected. According to the CFA Institute, 85% of its member investment professionals take ESG considerations into account when making investment decisions. This is 12% more than in 2017.

Many groups and companies now provide investment recommendations in the form of ESG reports making it one of financial advisor trends 2023. Almost three thousand corporations report their ESG performance in the MSCI ESG ratings. Companies are ranked based on their decarbonization goals, labor management practices, and projected temperature increases.

Despite this, many investors need help to assess the ESG effect. One survey found that 80% of investors around the world find it hard to manage ESG investments, and “money laundering” was cited as a major problem.

Recruitment Pressure by Retiring Advisors

Despite the growth of wealth management industry, over 103,000 current financial advisors are expected to retire over the next decade. This accounts for 40% of all advisors. Currently, more than half (44%) of all RIAs are at least 60 years old. One in ten (11%) is under 40 years old. Experts who are getting close to retirement age may be hesitant to use new technologies or take a hybrid approach to advice that includes AI advice.

How will wealth management organizations respond to this change? Experts say that about 240,000 more consultants will be needed in the wealth management field to meet demand. As a result, many companies are making more efforts to attract and hire a younger and more diverse workforce.

Further Digital Transformation

Digitalization is one of trends in wealth management 2023. Advances in digital technology have made it possible for wealth management firms to offer more personalized services to their clients. In fact, more than 85% of firms believe that improving client service through digital tools is their top priority. In other words, this is in line with the expectations of financiers.

Nearly 90% of people who took a recent survey by ThoughtLab said they prefer to use mobile apps for investing, and 75% of advisors think that digital engagement will become the norm in the next two years. Wealthtech is made up of platforms, automation services, and other digital tools that help wealth management companies connect with clients and give them advice. Wealthtech is one of the most important latest trends in wealth management.

Organizations that are good at managing money and use digital tools and methods well are doing well. Such companies, according to data collected by Liferay, demonstrate a 13% increase in productivity, an 8% increase in AUM (assets under management), and an 8% increase in revenue. These benefits come from a number of places, such as an easier onboarding process, reports on demand, better personalization, and AI-powered investment advice. Therefore, wealth management growth depends on digital.


This concludes our look at the five most important factors in the wealth management industry growth to watch over the next year. As worries about inflation rise and interest in cryptocurrencies grow, investors may look for other ways to invest their money.

We expect clients will require businesses to have the infrastructure in place to work with the next generation of investors and financial advisors. This will require reorganizing priorities and rethinking how to interact with others. These financial advisors will be able to attract and retain clients by providing them with the cutting-edge digital services they crave. This is enabled by following wealth management industry trends in 2023, too.

Digitalization of wealth management services will definitely boost the number of clients and the accuracy of investment predictions. Contact us to discover how we might install AI and Big Data benefits into your business.


Which country is best for wealth management?

According to a wealth management industry report, Cyprus, Singapore, Luxembourg, Gibraltar, and the United Arab Emirates.

  • When it comes to managing money outside the EU, Cyprus is a great place to do so. Establishing trusts and foundations is a common activity in this jurisdiction. Interest paid to non-residents is not subject to withholding tax, making Cyprus a tax haven. Although English is not an official language in Cyprus, it has a large and growing user base.
  • Many wealthy individuals choose Singapore as a country for offshore banking. It offers a favorable tax environment with no capital gains taxes, the most modern and reliable banking infrastructure, and first-class customer service.
  • Luxembourg’s economy and banking system are among the most stable in the world, and the country offers a full range of financial opportunities. Luxembourg’s financial industry has been a major source of economic growth for decades. There are no restrictions on non-resident bank accounts in Luxembourg, which is an advantage over other powerful European states. Since this is the case, it is one of the most convenient European offshore banking jurisdictions according to the wealth management industry statistics.
  • Gibraltar, a British Overseas Territory, is generally considered the best place for private offshore banking. It provides excellent diversification opportunities and some of the best asset management services. Gibraltar’s financial institutions, such as offshore trusts and foundations, are excellent options for protecting your assets.
  • The United Arab Emirates has one of the world’s safest and most prosperous economies. It has long been recognized as a leading offshore financial center and serves as the region’s economic core. One of the official languages is English.

What is an example of wealth management?

An insurance agency that advertises its sales representatives as “asset managers” is an extreme case. Alternatively, a client can hire an investment company whose primary function is to manage their assets but which positions itself as a wealth manager.

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