Financial Planners & Investment Advisers Industry Overview

Excerpt from Financial Planners & Investment Advisers Report

Companies in this industry provide customized investment advice and financial planning services. Major companies include US-based Ameriprise Financial and AXA Financial (a subsidiary of France's AXA), as well as AMP Limited (Australia), the wealth management unit of RBC (Canada), and units of diversified financial services companies such as Morgan Stanley (US).

Competitive Landscape

Demand is driven by consumer income and wealth and demographics. The profitability of individual firms depends largely on effective marketing. Large companies have some advantages in providing expertise in a wider range of investment options, and they may be able to charge lower fees. Small companies can compete successfully by providing better service and advice. The industry is concentrated: the 50 largest companies account for about half of revenue.

Products, Operations & Technology

The relationships between financial planners, investment advisers, and other professionals in the financial services industry are complex, and their roles often overlap. Financial planners help customers put together a plan to manage their financial resources; investment advisers suggest specific investments. A third of industry revenue for both investment advisers and financial planners comes from providing services to individuals. Financial planners help individuals form a plan that may include debt, asset, college, retirement, estate and tax planning, and may periodically check with the client to see how well the plan is being followed. Much of the planning revolves around an income and spending budget, with advice about the types of financial investments suitable for the client. Financial planners offer more comprehensive and detailed planning, often of a tax-sensitive nature, for wealthy individuals, and for organizations such as trusts, estates, and charitable foundations; planners also may recommend specific investments, in which case they function as investment advisers. There are about 68,000 certified financial planners in the US, according to the CFP Board of Standards.