Spending in financial planning will reach $257 million this year, and to contribute 15-20 per cent of overall wealth management IT spending by 2013, according to Celent, the Boston-based research and consulting firm.

The report, The Financial Planning Market Overview, said wealth managers will restart projects previously put on hold amid the financial crisis of 2008.

Among the conclusions of the report are that greater price elasticity and risk aversion of financial institutions has led to more careful technology budgeting on financial planning technology. It also found that financial planning is a high priority for firms, while competition for advisors with strong books of business is driving up the importance of front end sales and planning tools.

Celent also argued that there has been more focus on client-facing technologies, and argues that firms will increase use of self-directed planning tools to generate leads and make it easier for advisors to retain client loyalty.

“The competition for advisor talent is driving the need for modern enterprise-wide sales tools as part of a recruiting strategy. As a result, Celent expects firms to increase their spending on financial planning software from 8-10 per cent, with more focus on functionality, flexibility, and integration than in previous cycles.

Also, regulations and compliance will, as ever, drive demand for financial planning software, Celent said, citing developments such as the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under this legislation, the Securities and Exchange Commission has authority to impose regulations requiring "fiduciary duty" by broker-dealers and investment advisers to their customers.

Noting a trend already in evidence with firms such as Citi Private Bank, Celent pointed out that mobile devices and tablets will become alternative selling channels for wealth managers.

“These technologies, particularly tablets, provide a digital medium which is adequate, natural, and elegant enough to be an acceptable support for face-to-face client interactions. While it is unlikely that an advisor will create an integrated financial plan through this channel, vendors will need to develop applications that engage clients and facilitate deeper advisor-client interactions. This technology adoption will prove efficient while servicing the HNW and UHNW investors in particular,” the report said.