Wealth management advisors remain more than ever at their clients' side

The current geopolitical climate has not dampened the morale of wealth management advisors, which remains high. According to the latest BNP Paribas survey, 78% of wealth management advisors remain confident about their business despite the current climate. 67% of wealth management advisors believe their clients will be more concerned about the risk level of their investments, and 57% believe they will be more concerned about diversifying their assets.

Driven by strong business momentum, the morale of financial advisors remains very positive despite growing concerns about their business. However, a large majority (78%) of financial advisors remain confident about their business, and most (97%) say the profession is doing well (vs. 94% in 2019). Finding investment solutions suited to the inflationary environment and adapting to new regulations are the profession’s main challenges (cited by 70% and 66% of financial advisors, respectively). Long-term growth prospects remain positive for 84% of the financial advisors surveyed (vs. 82% in 2019).
 

The industry is expanding its range of investment solutions to offer greater diversification of investments

After the renewed confidence seen in 2021, financial advisors are once again sensing anxiety among their clients. Sixty-three percent of financial advisors believe their clients are worried about their investments, and two-thirds of the profession even believe their clients have sought to postpone certain financial investments they had been considering.

As a result, financial advisors anticipate that their clients’ expectations will shift toward greater investment security; 67% believe that clients will be more sensitive to risk levels, while 57% of the profession expect clients to focus on diversifying their assets. Consequently, financial advisors are expanding their range of investment solutions and plan to offer more structured products (53%), private equity (50%), and real estate investment trusts (48%). Finally, in addition to life insurance, financial advisors aim to increase the presence of personal protection and retirement products in their business portfolios. 54% of financial advisors plan to prioritize offering individual or group retirement products, and 39% plan to offer personal protection products.
 

Responsible investing elicits a high level of commitment from financial advisors, who are aware of the role they have to play

Following a sharp rise in awareness of the importance placed on the responsible investment aspect—a trend amplified by the post-COVID period—72% of financial advisors report once again this year that an increasing number of their clients want their investments to have meaning. SRI has thus become a permanent factor in fund selection criteria and has even doubled in importance over the past three years (a fund’s SRI status is important to 66% of financial advisors).

Although many financial advisors (72%) are aware of the role they play in educating clients, 68% of them would like more support from financial institutions on how to promote SRI products.
 

The industry remains calm in the face of changes to the structure of their market

The wealth management market is showing signs of consolidation. Nearly two-thirds of the industry are considering a sale or acquisition in the near or distant future. 41% of firms with six or more employees reported having an acquisition plan within the next two years, while 36% of firms with fewer than six employees reported having a sale plan more than two years from now.

This consolidation trend is set to continue: 45% of wealth management advisors currently believe that market consolidation will continue over the next three to five years. According to 61% of the wealth management advisors surveyed, this would allow firms to further develop their infrastructure, particularly in terms of equipment, tools, and hiring.