Wall Street & Technology: Blog: Financial Firms to Spend $28.5 Billion on Wealth Management IT By 2012

Financial Firms to Spend $28.5 Billion on Wealth Management IT By 2012

Wall Street firms are ready to spend on new wealth management technology, according to a report released today by Datamonitor that predicts spending on wealth management IT in North America, Europe and Asia-Pacific will reach $28.5 billion by 2012.

Specifically, financial advisors are expected to increase their wealth management IT spending at a compound annual growth rate of 6.7 percent between 2006 and 2012, private banking firms 4.5 percent, retail asset management organizations 4.7 percent and retail brokerages 3.3 percent.

The types of technologies these firms are expected to invest in are a bit surprising: Internet and presence technologies will attract the most new dollars, with an 8 percent compound annual growth rate between 2006 and 2012. Next are branch infrastructure (6.6 percent), portfolio management (6.3 percent) and intermediary integration (6 percent).

The Datamonitor report suggested that as wealth managers seek greater competitive differentiation, they will look to develop an ideal wealth management platform that will be comprised of seamlessly interconnected, service oriented architecture-enabled components combined with business intelligence and analytical CRM components.

A notable case in point is Fidelity, which is investing $50 million in a new WealthCentral advisor platform that will go live late in 2008. It will incorporate Oracle's Siebel CRM applications and financial planning software from Emerging Information Systems. Advent software will provide outsourced applications for portfolio management and reporting services. The new platform should avoid the need for data re-entry as information is shared between applications, offer single sign-on and allow advisors to pre-fill Fidelity forms such as account applications.

Posted by Penny Crosman at 03:39 PM

This is a public forum. CMP Media and its affiliates are not responsible for and do not control what is posted herein. CMP Media makes no warranties or guarantees concerning any advice dispensed by its staff members or readers.

Community standards in this comment area do not permit hate language, excessive profanity, or other patently offensive language. Please be aware that all information posted to this comment area becomes the property of CMP Media LLC and may be edited and republished in print or electronic format as outlined in CMP Media's Terms of Service.

Important Note: This comment area is NOT intended for commercial messages or solicitations of business.