Product Type: Market Research Report
Published by: TowerGroup
Published: June 2008
Product Code: R301-1472Description As an industry, financial services is built around gathering assets and creating wealth. Methods for
paying for this function have changed significantly over the past decade. No longer is the industry
based on transaction revenue; rather, it is becoming an advice-based business model in which
remuneration takes the form of fees based on the assets involved. Methods for calculating fees
have evolved from a simple percentage of the assets to a complex combination of variables. This
TowerGroup Research Note examines the growth and complexity of fees in wealth management as
pertains to the retail managed account market, characterized for the purposes of this Note as the
separately managed accounts and unified managed account products. We also look at the growth
of the managed account business in the brokerage industry, the shift from flat-fee-based or assetfee-
based billing to a more complex schema, and the additional complexities brought about by the
advancement of the products. The Note further highlights the advantages of a sophisticated fee
management platform and the potential return on investment that firms might realize in both
revenue and value.Table of Contents - Report Coverage
- Introduction
- Drivers and Trends in Fee Management
- Downward Pricing Pressure
- Need for Enterprise Control
- Move to Performance-Based Billing
- More Manager Diversification
- More Insourcing to Add
- Fee Management Challenges
- Growth of Account Types
- Data Management and Collection
- Homegrown Technology for Fee Management
- Getting Down to Brass Tacks: Lost Revenue
- Benefits of a Vendor-Based Fee Management Solution
- Transparency
- Reconciliation and Collection
- Fee Flexibility
- Presentment
- Summary
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