In a new report, Automated Wealth Management Compliance Solutions, consultants Celent examine the evolving capabilities and functionalities of compliance systems used by wealth managers.

It shows that the compliance market is growing rapidly; Celent estimate the market will grow from $178 million in 2007 to $318 million in 2011, a 15 per cent annual growth rate.

The growing number of registered investment advisors is seen as likely to spend the most money on compliance in the wealth management space, and hedge funds will spend much more on compliance IT as a result of increased investor and regulatory pressure.

The report predicts that compliance systems and broader risk systems for larger firms will converge over the next two to three years and that compliance will become a component of primary back office systems, e-mail surveillance and retention systems, workflow tools and document retention systems.

"There is growing interest in compliance solutions," said Robert Ellis, senior analyst and co-author of the report. "While each segment of the industry has its own drivers, there is a common need for wealth management-specific compliance solutions."

The report also makes detailed comparisons of several compliance systems and explores the compliance needs of different segments of the wealth management industry.