According to the study, although some wealth management firms believe the bourgeoning self-directed market will diminish the value of advisor services, this new trend presents an opportunity for the sector.

"Consumers’ increasing desire for control over their financial outlook has led to a growing demand for self-directed solutions from investors in higher wealth segments," Alois Pirker, research director at Aite Group and author of the report, said.

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"Over the next decade, we anticipate that wealth management firms will provide investors with several multi-channel offers to appeal to their growing demand for online access to information and tools. Firms that provide a self-directed investing solution will hold an advantage over those that do not, as they will be better positioned to capitalize on the latest consumer technologies and online investing innovations," Pirker added.

Other major findings of the research report include:

  • Online brokers have gained a 3% market share from full-service firms in both 2009 and 2010 in the US, while most types of full-service brokerage firms either lost or maintained market share
  • Financial advisors to high-net-worth investors estimate that approximately 25% of their clients have a self-directed account, as well as a financial advisor
  • Of the banks surveyed that currently lack a self-directed offering, approximately half have plans to introduce such a service in the near future
  • Half of the 19 North American banks surveyed are enhancing their online channel in various capacities
  • The research found that an opportunity exists for meeting the needs of younger generations that have grown accustomed to accessing and purchasing products and services, both offline and online
  • More than half of the US financial advisors surveyed in Aite Group’s annual review of 400 advisors stated their firm does not offer a self-directed channel

"The technological innovations over the past 10 years have forever changed the way that consumers want to interact with their financial services firms," Joe Stensland, senior vice president and managing director of Wealth Management Solutions at Scivantage, said.

"Our wealth management clients are looking to invest in a direct business model to cater to the needs of clients in a way that is scalable and cost-effective. Having one platform in place that offers both, the full-service and the self-directed model, gives firms the potential to provide more options in products and services, and help grow their business," Stensland added.

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