Automated Wealth Management Compliance Solutions

by Isabella Fonseca, April 24, 2007


New York, NY, USA April 24, 2007

Celent estimates the market for wealth management compliance systems will grow 15% from US$178 million in 2007 to US$318 million by 2011.

Increased oversight of wealth management firms has led to a new generation of automated compliance products that allow chief compliance officers to monitor and track their firms and individual employees as they seek to comply with increasingly complex and numerous regulations. Hedge funds, broker-dealers, institutional asset managers, trust companies, and retail financial advisors need automated tools to alleviate increasing regulatory and investor pressure and keep their firms on the straight and narrow path.

In a new report, , Celent examines the evolving capabilities and functionalities of compliance systems used by wealth management firms. Key findings include:

  • The compliance market is growing rapidly. Celent estimates the market will grow from US$178 million in 2007 to $318 million in 2011, a 15% annual growth rate.
  • Registered investment advisors (due to the large and growing number of firms) will spend the most money on compliance in the wealth management space.
  • Hedge funds will spend much more on compliance IT as a result of increased investor and regulatory pressure.
  • Compliance systems and broader risk systems for larger firms will converge over the next two to three years.
  • Compliance will become a component of primary back office systems, email surveillance and retention systems, workflow tools and document retention systems.
  • "There is growing interest in compliance solutions," says Robert Ellis, senior analyst and co-author of the report. "While each segment of the industry has its own drivers, there is a common need for wealth management-specific compliance solutions."

    "Compliance continues to be an ever-growing responsibility for senior managers in a variety of financial services firms, especially those with a significant retail business component," adds Isabella Fonseca, senior analyst and co-author of the report.

    The report makes detailed comparisons of several compliance systems and explores the compliance needs of different segments of the wealth management industry.Celent utilizes its ABCD Vendor View (Advanced Technology, Breadth of Functionality, Customer Base, and Depth of Client Services analysis to evaluate the seven firms.

    The report is 52 pages long and contains 13 tables and 12 figures. A table of contents is available online.

    Members of Celent's Retail Securities & Investments research services can download the report electronically by clicking on the icon to the left. Non-members should contact for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

New York, NY, USA April 24, 2007

Executive Summary 3
Introduction to Wealth Management Compliance Software 6
Functionalities of Automated Compliance Systems 9
Drivers for Wealth Management Compliance Software 13
The Market for Wealth Management Compliance Software 18
Selected Compliance Software Vendor Comparisons 27
ABCD Vendor View of Wealth Management Compliance Software 44
Conclusions 46
Appendix 1: Wealth Management Compliance Vendors 47
Appendix 2: Definition of Compliance Systems Spending 49
Objectivity and Methodology 51

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