Overall, industry fees as a percentage of assets fell to 1.13 percent last year following a period of stability, and the report said that decline may indicate pressure from new competitors like robo-advisers.
While technology has put pressure on the industry, Kennedy said it has also enabled advisers to spend more time with clients, which is important for growth. But a key area of concern for advisers is attracting younger clients.
Aging Clients
Baby Boomers, Americans born from about 1946 to 1965, account for half of the industry’s assets under management, according to the report. Clients born before 1945 now are 40 percent. Yet members of Generation X (1966-1980) represent only 8 percent of assets and millennials represent 2 percent of money managed by full-service retail firms.
PriceMetrix called the stagnant level of Generation X clients “troubling,” adding: “Attracting this group of clients, many of whom have entered their peak earning and saving years, will be vital to the industry’s continued growth over the next 20 years.”
The PriceMetrix report was based on data the firm compiles representing 24 North American wealth management firms with more than $5 trillion in assets under management. PriceMetrix was acquired by McKinsey in 2016.
This article was provided by Bloomberg News.