Celent report examines new compliance technologies

FWR Staff

7 June 2007

Research firm sees compliance-system market growing to $318 million by 2011. In the wake of recently heightened oversight of wealth-management firms has led to the emergence of automated compliance products that help compliance officers as they work to track and monitor firm-wide activity. As a result, says financial-industry research firm Celent, the market for wealth-management-compliance systems stands to grow at an annual rate of 15% through 2010.

"There is growing interest in compliance solutions," says Celent senior analyst Robert Ellis, who co-wrote the report Automated Wealth Management Compliance Solutions. "While each segment of the industry has its own drivers, there is a common need for wealth management-specific compliance solutions."

RIAs and hedge funds

The wealth-management-compliance technology market is worth about $178 million now. The growth Celent sees coming will be fuelled especially by RIAs (due to an expected increase in the number of firms) and hedge funds (in reaction to pressure from regulators and investors). The study also predicts that compliance systems and broader risk-mitigation systems will converge for larger firms as compliance IT meshes with email-surveillance, document-retention and primary back-office functions.

Isabella Fonseca, another co-author of Automated Wealth Management Compliance Solutions, says that compliance-related tasks are growing in number and overall complexity, especially for firms "with a significant retail business component."

|image1|

The 52-page report lays out the different compliance needs of various wealth-management segments and compares seven compliance-system vendors using something Celent calls the "ABCD Vendor View" to make its evaluations. -FWR