Financial Advisory Services Market Size & Share, by Service Type (Investment Advisory, Tax Planning, Financial Planning, Risk Management, Business & Corporate Finance, Wealth Management); Asset Class (Equities, Fixed Income, Real Estate, Alternative Investments, Commodities); End User (Healthcare, E-Commerce & Retail, BFSI, IT & Telecom, Manufacturing, Transportation & Logistics) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2024-2036

Growth Drivers

• SMEs are increasingly in need of financial advising services - The best method to add value for SMEs is to offer financial advising services, which allow them to charge as much as they like while still providing their small business clients with value. Furthermore, 78% of small firms prefer an accountant who is a trusted counsel, per a recent Accounting Today survey. Actually, this need came in 10% higher than the perception of reasonably priced services.
  
  Additionally, during the COVID-19 pandemic, SMEs suffered from inadequate financial management; as a result, a few big banks worked together to offer SMEs appropriate financial advising services. As an example, as part of their ongoing commitment to their clients in this market, Gulf Bank works with Balance Business consulting, a Kuwaiti SME, to offer financial consulting services to entrepreneurs and SMEs. The Bank's strategy to offer financial and advisory services to the SME sector is the foundation of this partnership. Therefore, the financial advisory services market is expanding due to the growing number of these benefits.
• Global high-net-worth individuals' (HNWIs') constant climb - Due to improved money management and wise investment choices, the number of high net worth individuals (HNWIs) is rising globally. High-net-worth people also need extra services from wealth managers and financial advisors because of their significant holdings. HNWIs can access hedge funds and private equity firms, as well as receive assistance with trusts and estates, investment management, and tax guidance.
  
  Moreover, over 13% of clients of financial advisors are high net worth individuals. Furthermore, because it takes more labor to protect and safeguard their assets the more money HNWIs have, the need for financial advising services is considerable. These people typically want individualized services for things like estate planning, tax preparation, financial management, and so on.
• Increasing robo advisory usage - The financial advisory services market growing reliance on algorithm-driven advice services is reflected in the growing use of robo-advisors. Robo-advisors use algorithms to provide asset allocation, portfolio management, and automated, cost-effective investing advice. This trend offers low-cost options to tech-savvy investors. It streamlines the investing process and offers effective and easily accessible investment recommendations. It is also changing the way financial consulting services are delivered and appealing to a wider audience.
  
  The necessity to manage people's assets for long-term financial goals with a low risk of loss is one of the factors that is expected to propel the worldwide robo advising industry’s growth. The World Bank reports that the share of insurance and financial services exported along with commercial services rose from 7.65% in 2005 to 8.56% in 2018.

Challenges

• Increasing compliance and regulation needs to restrain market expansion - The market for financial advising services may be severely limited by the escalating regulatory and compliance requirements. Governments and financial authorities are enforcing stronger laws to protect consumers and provide transparency, which means that advisory businesses need to invest more time and resources in remaining compliant.
  
  The operational costs of advising businesses may increase as a result of the training, administrative responsibilities, and technology advancements required to meet regulatory requirements. Advisors may also get more involved in compliance-related tasks, which could take time away from their main objective of providing customers with personalized financial advice. Strict restrictions may also discourage innovation in business models or service offerings due to concerns about permission from regulators and compliance.
• The COVID-19 pandemic's Effect on the market - COVID-19 has a detrimental effect on the financial advisory services market because of the global financial crisis, market volatility, and economic depression. Investors and companies offering financial advice were affected by the outbreak, and investors observed changes in their existing investments right away. As a result, during the global health crisis, there has been a decline in the demand for financial counseling services.