Wealth management technology spending is estimated to reach $4.4 billion this year and grow by around 6.4 per cent in 2013, according to Celent, the consultancy.

In general, Asia-Pacific and North American markets are driving IT spending growth for next year, while the European market will drag down growth in spending, it says.

In the report, Wealth Management IT Spending: A Global Perspective, Celent examined key IT trends, regional priorities and trends, front versus middle/back office spending, and internal versus external spending by region for the wealth management industry. It is a companion to the Celent report IT Trends and Spending Implications for the Securities & Investments Industry, issued in October, which provides a basic summary of the material covered in this report.

"A majority of IT spending will go to the front office. Tools that will help the advisor capture client information and engage clients through more advanced and interactive tools will gain priority," said Isabella Fonseca, research director with Celent's Wealth Management Group and co-author of the report.

"Furthermore, wealth managers will allocate more of their IT resources to external software and services, as opposed to legacy internal systems and hardware."

Further ahead

By 2016, Celent expects global wealth management IT spending to reach $5.7 billion.

Europe accounts for 43 per cent ($1.9 billion) of global wealth management IT spending, while North America makes up 39 per cent ($ 1.7 billion). At 18 per cent ($0.79 billion), Asia-Pacific still accounts for the lowest total spending among regions.

Growth in European IT spending is predicted to be cut in half, from 7.5 per cent in 2012 to 4.3 per cent in 2013, over the next year. Celent expects wealth management IT spending in Europe to reach $1.97 billion in 2013. The firm predicts a 10 per cent increase in Asian IT spending for 2013, and an 8 per cent compound annual growth rate over the next five years, ultimately reaching $1.08 billion by 2016.