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Trends in Wealth Management

New technologies, younger financial advisors and fresh investment opportunities are disrupting the wealth management landscape, leading investors to lean towards controlling investments with digital apps. Lamar University’s online Bachelor of Business Administration (BBA) in Finance program prepares graduates to make informed decisions in finance. The Intermediate Financial Management course teaches students to stay current with trends in wealth management. This class examines analytical techniques used in financial decision-making, including dividend policy, funds analysis, financial forecasting, valuation models, ratio analysis and capital structure.

In this online program, students will gain the theoretical background and analytical tools essential for various careers in management, investments and security analysis, international and personal finance and more. This program enables students to combine financial theory with practice and statistical analysis using Excel while learning how to determine the value of financial assets, such as bonds, stocks and derivatives. As a result, graduates will be able to make effective and intelligent judgments as finance professionals.

Important Current Trends in Wealth Management

Investors used direct indexing to find customized investment solutions. While direct indexing isn’t a new concept, it’s become increasingly popular. Direct indexing involves buying the individual stocks that make up an index, such as the S&P SmallCap 600 or the S&P 500, in the same amounts as the index. Previously, buying the numerous stocks that make up an index would be incredibly expensive due to exorbitant fees and commissions. However, with the emergence of zero-commission stock trading on many online trading platforms, the outrageous expense of replicating an index is no longer a primary concern.

Because investors need to know the exact number of shares to buy and reweigh them occasionally, many finance companies offer automated direct indexing solutions for independent investors. This investment strategy provides more control for the investor than other investments, such as owning an exchange-traded fund (ETF) or mutual fund. Research by Morgan Stanley published in 2021 predicts that by 2025 there will be $1.5 trillion in direct indexing managed accounts, significantly higher than $350 billion in 2020.

Some ways that the digital age has transformed investing and wealth management to benefit the investor experience involve the value registered investment advisors (RIAs) provide their clients. Below are a few steps that RIAs can take to help their clients and grow their businesses:

  • Add more supplemental private investment and alternatives. Using highly trained specialists with considerable buying power to access exclusive investments can increase alternative investments.
  • Be proactive. RIAs must proactively recommend ways to add value or risk becoming obsolete.
  • Ditch the 60/40 rule. Instead of using the 60/40 stock-bond allocation to protect clients from a market downturn, RIAs use tail hedging or risk mitigation.

Three major trends currently reshaping the investment world are environmental and social goals (ESG), custom indexing and women in wealth. Investors progressively align their assets with environmental and social goals while seeking direct indexing solutions. Women are increasingly becoming the primary financial decision-maker regarding investments in American households. While prioritizing long-term goals and having unique investment preferences, RIAs must refine their service model to provide services and acquire assets.

What’s Next

This AACSB-accredited degree program at Lamar University will train students to be job-ready upon graduation. The core coursework includes management, business law, finance, technology and marketing to qualify graduates for a career as an investment banker, financial consultant, financial planner, commercial banker, financial services manager and more.

Learn more about Lamar University’s online Bachelor of Business Administration in Finance program.

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