AUTHOR: Robert J. Ellis and Ravi Nawal, Celent

WHAT IT IS:The Global Credit Crisis: Implications for North American Wealth Management predicts how the financial crisis may impact investors' behavior concerning wealth management providers.

MAJOR FINDINGS:The financial crisis could further widen the gap between the groups of clients that independent financial advisors serve. The mass market has always been a source of struggle for independent financial advisors and wirehouse brokers alike. The economic downturn could further exacerbate this problem.

Many middle-market investors have seen poor portfolio performance during the downturn, based on plans implemented at large brokerage firms. This could increase these clients' negative views of those relationships, forcing middle-market investors to become nearly entirely self-served, a trend this group has crept toward in recent years.

The economic turmoil may also cause middle-market investors to focus more on low-risk products, such as life insurance, annuities and CDs, in the long term, and pull out of their equity and mutual fund investments. It's up to providers whether they'll offer such low-risk, guaranteed-income products at a low cost. If not, the study warns, many of these clients will turn away from professional advice.

High-net-worth investors, however, will continue to seek professional advice despite the hits their portfolios have taken recently. Ellis and Nawal do expect them, though, to demand more flexible compensation models in the future. They'll prefer to pay wealth managers based on absolute returns associated with the level of risk taken.

They may also reduce their exposure to equities and real estate, focusing more on efficient products like UMAs. Older HNW investors will likely increase their exposure to surefire government bonds, pulling almost entirely out of private equity and hedge funds, which faced trouble in 2008. ETFs-especially short and leveraged ones-will see vast growth from this segment of investors, the paper predicts.

HIGHLIGHTS:Nervous to put all their eggs in one volatile basket, HNW investors may seek multiple sources of expertise in the future. Ultra-HNW investors, with more than $3 million in investable assets, will consolidate assets with one trusted advisor.-Stacy Schultz

In the current market, many firms may be tempted to cut corners on compliance. As they deal with disappoxxxxxxlients to calm their fears.

Jane Worthington is manager of information products and publisher of RegulatoryRegister.com at National Regulatory Services, a division of SourceMedia.

A well diversified portfolio should fend off sudden steep losses because its components behave differently in various market conditions. But in a distressed market, like this one, correlations have moved up sharply-and stayed there.

AUTHOR: Robert J. Ellis and Ravi Nawal, Celent

WHAT IT IS:The Global Credit Crisis: Implications for North American Wealth Management predicts how the financial crisis may impact investors' behavior concerning wealth management providers.

MAJOR FINDINGS:The mass market has always been a challenging one for independent advisors and wirehouse brokers to serve, and today's market could further exacerbate the problem. Many middle-market investors have seen poor performance in the downturn, based on plans implemented at large brokerage firms. This could injur their views of those relationships, forcing middle-market investors toward self-service, a trend they've crept toward in recent years.

The economic turmoil may also cause middle-market investors to focus on low-risk products, such as life insurance, annuities and CDs, and to pull out of equities and mutual funds. If providers don't offer low-risk, guaranteed-income products at a low cost, many of these clients will turn away from professional advice.

High-net-worth investors will continue to seek professional advice despite the hits their portfolios have taken, though they may demand more flexible compensation models based on absolute returns in the future. They may also reduce their exposure to equities and real estate, focusing more on efficient products like UMAs. Older HNW investors may increase their exposure to surefire government bonds, pulling almost entirely out of private equity and hedge funds. They will also enhance their use of ETFs.

HIGHLIGHTS:HNW investors may seek multiple sources of expertise soon. But ultra-HNW investors, with more than $3 million in investable assets, will consolidate assets with one trusted advisor. All HNW investors will continue their stride toward RIAs, though.