The U.S. wealth management market reached $58 trillion at the end of 2024, a 180% increase since 2017, and is projected to grow to $90 trillion within the next five years, according to a new thought leadership piece from Fi-Tek's Mike Tropeano, CFA. The growth is driven primarily by Gen X and Millennials entering their peak income accumulation phase, alongside an estimated $22 trillion intergenerational asset transfer over the next decade. Three specific wealth movements are at the center of this shift: assets moving from 401Ks to rollover IRAs, transfers between spouses, and transfers to the next generation.
The business model problem
Most wealth management firms still rely on AUM-based fees, which cap upside as clients move assets or seek lower-cost alternatives. Fi-Tek's analysis argues that this model is increasingly mismatched with the expectations of younger investors. These clients, shaped by digital fluency, expect immediacy, transparency, and purpose-driven engagement. They evaluate wealth managers not only on expertise and returns but on the quality and depth of the overall experience provided.
Non-traditional providers are raising the bar. AI-native platforms can now analyze an investor's full financial position, including tax considerations, to develop comprehensive financial plans and portfolio recommendations. Rather than eliminating advisors, this technology redefines how efficient and holistic their work can be, enabling hyper-personalization at scale and a more scalable operating model overall.
Three areas of focus
The article outlines three critical areas for firms to address:
- Conduct a 360-degree review of the client experience across all channels, benchmarked against both traditional and non-traditional competitors.
- Reimagine data aggregation to deliver the full balance sheet view that investors increasingly demand.
- Become agentic — leverage conversational AI and virtual agents to move beyond static reporting toward real-time, actionable insights and autonomous execution.
Tradeoffs
Shifting from AUM-based fees to subscription or outcome-based pricing requires significant operational changes. Firms must unbundle advice, embed AI-driven tax-loss harvesting, and re-architect their revenue models. The risk of not doing so is substantial: firms that fail to adapt risk losing up to 40% of assets under management to robo-advisors and direct indexing platforms, according to Fi-Tek's analysis.
Bottom line
The wealth management industry is at a inflection point. The $90 trillion growth projection and $22 trillion intergenerational transfer create a window of opportunity, but only for firms willing to treat transformation as a journey, not a destination. Those that adopt a change management mindset today and reimagine their business models around emerging client expectations and technology will be best positioned to lead in the years ahead.