The vast majority of wealth managers plan to add more products through third-party offerings in the near future, according to a new report from Ernst & Young LLP.

The study, Investing in the future: 2011 US wealth management study: a focus on product and client trends, offers the latest insights into the future of wealth management, including key changes wealth managers are planning. Ernst & Young developed this study to identify current and emerging trends, the risks and challenges professionals face and the steps they are taking for the future.

Key findings of the study include:

• Nearly 80 percent of wealth managers plan to expand their open-architecture strategy to offer more third-party products. This trend could change the industry in fundamental ways.
• Annual product reviews take place to ensure that best-of-breed products are offered to clients. Most firms say doing this is a good way to remain competitive and identify new products.
• Among firms that actively offer managed accounts, nearly 40 percent expect annual growth in this category to exceed 15 percent.
• Wealth managers expect success from advisor-directed accounts and unified managed accounts. They predict a 14 percent increase in assets under management in both categories.
• Wealth managers are responding to new regulations, such as the new fiduciary standards. Some 80 percent of them are investing in compliance--new people and better processing platforms.
• More wealth managers are shifting to online channels to conduct both service and sales, especially with mass-affluent clients.
• Wealth-management firms are investing in alternative client-service approaches to improve their clients’ experiences and enable advisors to collect more assets.

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By Ayo Mseka
Editor-In-Chief
Advisor Today