S03.6 · Financial Services & Capital Markets
Asset managers and RIAs overseeing ~$130T in global AUM, as AI automates portfolio construction and client onboarding.
Global assets under management reached roughly $128-132T in 2024 (BCG Global Asset Management Report 2025), with PwC projecting $170-200T by 2029 — a band wide enough to signal that the two research houses are scoping different things, not disagreeing about the same one. The change that matters commercially is agentic AI's advance into portfolio construction, compliance reporting and client onboarding, because it goes directly at the moat human financial advice has long held over mass-affluent clients. The segment's most defensible pricing has rested on that relationship, and the cost of replicating it is collapsing.
AUM grew roughly 12% in 2024, and BCG attributes most of that to market appreciation rather than net new flows — a distinction worth holding onto, since appreciation is beta and flows are the business. Forward net-new-flow growth is forecast at a far more modest ~4-5%. The fee pool is moving even where the assets are not: PwC expects private markets to account for more than half of industry revenue by 2030, because private-markets management fees run well above the fee-on-AUM economics of traditional long-only strategies. Geographically, the US holds more than half of global AUM, Europe remains fragmented and cross-border by comparison, and Asia is the fastest-growing wealth pool globally — rising household wealth formation, not just asset-price appreciation.
The top 10 managers control more than 30% of global AUM; a long tail of thousands of registered investment advisors and boutique managers holds the rest. Upstream sit custodians and index and data providers; downstream, wealth platforms and retirement and insurance distribution. The core economics are fee-on-AUM, and that fee has been ground down for decades by the shift toward passive strategies, which deliver comparable market exposure at a fraction of active management fees. The business is capital-light. SEC and FCA registration gating is moderate next to a bank charter or broker-dealer license — one reason the RIA channel proliferated into thousands of independent practices rather than consolidating around a handful of licensed entities.
The adjacent categories — private markets and alternatives, private banking, insurance annuities and direct-indexing fintech — split by motive. Traditional long-only managers building out alternatives capability are protecting a fee base compressing underneath them. RIA aggregation — consolidating a fragmented base of independent advisory practices into larger platforms — adds dollars: scale in the advisory channel converts directly into AUM growth and referral density, with no change in underlying investment performance required.
Agentic AI's near-term work concentrates in portfolio construction, compliance reporting and client onboarding — rules-heavy, data-intensive functions previously staffed by advisor-support teams. The advisor-support cost line compresses first. The harder effect is on the advice itself. For mass-affluent clients, whose portfolios and financial planning needs are standardized, an AI-driven advisory workflow can now match a human advisor's output at a small fraction of the cost, and the fee attached to human advice has to answer for that gap. The effect is least pronounced at the high-net-worth and ultra-high-net-worth end, where complexity and relationship depth still favor a human advisor.
Direct indexing is the related boundary shift. AI-driven direct indexing lets a platform construct a personalized, tax-optimized portfolio that replicates an index at the individual security level — a capability that used to require either a bespoke separately managed account or a human advisor's active involvement, and now increasingly requires neither. It blurs the line between asset management and wealth advice, and the fee logic of both. Operational automation is already underway across the industry. Disintermediation of human advice for mass-affluent clients is a 2-5 year horizon, gated by client trust and regulatory comfort with AI-generated investment advice rather than by any remaining technical barrier.