The financial services industry has been familiar with outsourcing for some time but wealth managers have been slower to adapt, the report said.

“This hesitancy to use outsourcing can be largely attributed to confidentiality and privacy issues inherent in managing wealth of highly-valued clients,” it says.

Even so, the meltdown of the sub-prime market and associated market pyrotechnics has encouraged firms, facing higher costs and regulations, to examine the outsourcing idea with more vigour, the report said.

“Generally speaking, the further a wealth management function is from a client 'touchpoint', the more likely it is to be outsourced,” the report said.

For example, wealth managers have rarely outsourced front office activities; it is more widespread to outsource functions such as global custody, securities lending, client servicing, and accounting and settlement of trades in complex financial instruments.

The report said firms will increasingly engage outsourcing providers in the areas of: client-facing technology, advisor/relationship manager-facing technology, channels, data management, CRM, client reporting, providing mobile presence, portfolio management/order management for execution services, and seamless integration of channels for various products and services delivery.