Wealth Management

Today there are nearly 8,100 private wealth management businesses in the United States alone, according to IBISWorld. These range from major banks such as Wells Fargo with large wealth-management divisions to mom-and-pop firms with fewer than 15 employees. Total assets under management (AUM) at the world’s 500 largest asset managers reached $113.7 trillion at the end of 2022, according to the Thinking Ahead Institute and Pensions & Investments. This was a significant increase from $84.9 trillion in 2016.

The industry is quite fragmented, with major banks, broker/dealers, regional and boutique firms, robo advisor firms (where computers manage portfolios), and independent wealth managers competing for business. The 20 largest firms held 44.2 percent of industry AUM at the end of 2022, according to Pensions & Investments. The 10 largest firms worldwide in terms of AUM were:

1. BlackRock (U.S.)
2. Vanguard Group (U.S.)
3. Fidelity Investments (U.S.)
4. State Street Global (U.S.)
5. P. Morgan Chase (U.S.)
6. Goldman Sachs Group (U.S.)
7. Allianz Group (Germany)
8. Capital Group (U.S.)
9. Amundi (France)
10. UBS (Switzerland)

Wealth management firms are located throughout the United States and the world, but firms in the U.S. and Canada accounted for 59.5 percent of assets under management in 2019, according to Pensions & Investments, up from 51.7 percent in 2018. Many U.S.-based firms are headquartered in New York and other major cities such as Boston, Chicago, Dallas, Denver, Houston, Los Angeles, and San Francisco. Many of the largest U.S. companies also offer wealth management services to customers in foreign countries

The Federal Reserve reports that the 10 largest private banks (based on AUM) in the United States as of December 31, 2023, were:

1. JPMorgan Chase: $3.40 trillion
2. Bank of America: $2.54 trillion
3. Wells Fargo: $1.73 trillion
4. Citigroup: $1.68 trillion
5. S. Bancorp: $650.7 billion
6. PNC Financial Services: $557.5 billion
7. Truist Bank: $527.5 billion
8. Goldman Sachs: $521.1 billion
9. Capital One Financial: $475.6 billion
10. TD Group US Holdings: $367.2 billion

The Forbes Global 2000 is an annual ranking of the top 2,000 public companies in the world in a range of categories. Forbes ranks the companies using a combination of four metrics: sales, profit, assets, and market value. A total of 302 banks appeared on Forbes’ 2023 Global 2000 list, up from 292 in 2022. The top U.S.-headquartered companies were JPMorgan Chase (ranked #1), Bank of America (#6), Wells Fargo (#17), Citigroup (#24), Morgan Stanley (#30), US Bancorp (#30), and Goldman Sachs (#33),

Approximately 104,000 people were employed in private banking services in 2023, according to IBISWorld. Overall employment decreased during the economic recession and the COVID-19 pandemic to some degree (especially for lower-level positions), but the industry has rebounded strongly in the past five years, and there will continue to be good opportunities for wealth management professionals. One fast-growing career is that of personal financial advisors (which includes those who work as wealth managers). Job opportunities for advisors who work for companies that manage funds, trusts, and other financial vehicles are expected to increase by 17.5 percent from 2022 to 2032, according to the U.S. Department of Labor (DOL), or much faster than the average for all careers. Employment for financial analysts who work for companies that manage funds, trusts, and other financial vehicles will increase by 23.4 percent (much faster than the average). Other fast-growing careers include those in compliance, computer security, marketing, social media, programming, and quantitative engineering.

Demand is expected to be strong for new wealth managers as a result of the aging workforce and the transfer of wealth to younger generations and the growing number of self-made twenty- and thirty-something millionaires. The professional services firm EY reports that “Generation X and Y investors will accumulate close to $46 trillion in assets by the end of the decade, including $18 trillion in inherited assets from baby boomer parents.”

Many noteworthy professional organizations serve those working in wealth management and related industries.

• The American Bankers Association describes itself as the “voice of the nation’s $23.7 trillion banking industry, which is composed of small, regional, and large banks that together employ approximately 2.1 million people, safeguard $18.8 trillion in deposits, and extend $12.5 trillion in loans.” It provides extensive continuing-education programs, publishes the ABA Banking Journal, and hosts the Wealth Management & Trust Conference.
• The CFA Institute offers certification and continuing-education opportunities. It has more than 190,000 CFA charterholders in more than 160 markets.
• The Chartered Alternate Investment Analyst Association provides a well-respected continuing-education program and certification.
• The International Association for Quantitative Finance offers membership for both students and professionals. Its Web site contains useful education and job-search resources, including tips on resume preparation and interviewing.
• The Investment Company Institute’s members include mutual funds, exchange-traded funds, closed-end funds, and unit investment trusts. It offers continuing-education opportunities and publishes the Investment Company Fact Book.
• The Investments and Wealth Institute provides certification, continuing education, and other resources to its members, which include investment consultants and analysts, accountants, and others who provide financial services and advice to corporations, individuals, nonprofits, and retirement/pension plans.
• The CMT Association is a nonprofit professional regulatory organization that offers certification, publications, and continuing-education opportunities.
• The National Futures Association is the self-regulatory organization for the U.S. derivatives industry, including retail off-exchange foreign currencies, on-exchange traded futures, and OTC derivatives (swaps).
• The Securities Industry and Financial Markets Association describes itself as the “leading trade association for broker-dealers, investment banks, and asset managers operating in the U.S. and global capital markets.” It also offers the following professional societies for individual members: the Compliance and Legal Society and the Financial Management Society.