Aite Group Study Shows Opportunities Exist for Wealth Management Firms in Self-Directed Investor Market

Firms that leverage a self-directed investment platform will be at an advantage to meet the needs of this growing client segment

JERSEY CITY, N.J. — September 27, 2011Scivantage, a leading provider of Web-based, front- and middle-office technology solutions to the financial services industry, and Aite Group, a leading independent research and advisory firm focused on business, technology and regulatory issues and their impact on the financial services industry, today announced the results of a research report that examines the growth of the self-directed investor market and the opportunities this trend provides to wealth management firms and financial advisors.

Following significant portfolio losses experienced in 2008 and 2009, investors have become more cautious, which has led them to seek greater control over their financial investments, leading to the growing demand for self-directed options from the wealth management industry. Although some wealth management firms believe the bourgeoning self-directed market will diminish the value of advisor services, this new trend presents an opportunity for the sector, according to the study.

“Consumers’ increasing desire for control over their financial outlook has led to a growing demand for self-directed solutions from investors in higher wealth segments,” Alois Pirker, Research Director at Aite Group and author of the report, said. “Over the next decade, we anticipate that wealth management firms will provide investors with several multi-channel offers to appeal to their growing demand for online access to information and tools. Firms that provide a self-directed investing solution will hold an advantage over those that do not, as they will be better positioned to capitalize on the latest consumer technologies and online investing innovations.”

Other major findings of the research report include:

  • Online brokers have gained a 3% market share from full-service firms in both 2009 and 2010 in the US, while most types of full-service brokerage firms either lost or maintained market share
  • Financial advisors to high-net-worth investors estimate that approximately 25% of their clients have a self-directed account, as well as a financial advisor
  • Of the banks surveyed that currently lack a self-directed offering, approximately half have plans to introduce such a service in the near future
  • Half of the 19 North American banks surveyed are enhancing their online channel in various capacities
  • The research found that an opportunity exists for meeting the needs of younger generations that have grown accustomed to accessing and purchasing products and services, both offline and online
  • More than half of the US financial advisors surveyed in Aite Group’s annual review of 400 advisors stated their firm does not offer a self-directed channel

“The technological innovations over the past 10 years have forever changed the way that consumers want to interact with their financial services firms,” Joe Stensland, Senior Vice President and Managing Director of Wealth Management Solutions at Scivantage, said. “Our wealth management clients are looking to invest in a direct business model to cater to the needs of clients in a way that is scalable and cost-effective. Having one platform in place that offers both, the full-service and the self-directed model, gives firms the potential to provide more options in products and services, and help grow their business.”

View a full copy of the report titled “Blurring the Lines: The Impact and Important of Self-Directed Investing in Wealth Management”, or listen to a recording of a Webinar hosted by Aite Group and Scivantage on the topic of the self-directed investor market.

Download Report: http://tiny.cc/2whvs
View On-demand Recording: http://tiny.cc/io4c9

About Aite Group

Aite Group is an independent research and advisory firm focused on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, securities & investments, and insurance, Aite Group’s analysts deliver comprehensive, actionable advice to key market participants in financial services. Headquartered in Boston with a presence in Chicago, New York, San Francisco, London, and Milan, Aite Group works with its clients as a partner, advisor, and catalyst, challenging their basic assumptions and ensuring they remain at the forefront of industry trends.

About Scivantage

Leading financial institutions depend on Scivantage for essential front- and middle-office applications that deliver transaction-critical data, automate key business processes and drive operational efficiencies. Scivantage’s proven, back-office independent brokerage solutions offer a powerful suite of applications that span the workflow of financial professionals and support the complex investment needs of the retail investor. From online trading and event notification management to automated account opening, maintenance and funding, Scivantage enables financial institutions and financial professionals to dramatically reduce operational costs, strengthen customer relationships and improve productivity. For more information, please visitwww.scivantage.com or contact us at +1.866.724.8268.

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Posted in Press Release.