Accenture Capital Markets Blog    

Many of us find ourselves in motion, as cities open up, we are looking to return to work. Business travel is on the rise again. Regardless of where we go, we’re ultimately anchored to pre-pandemic locations. A large number of us, however, used timing and circumstances (e.g. remote work opportunities, borderless talent and the suburb’s attractiveness) to relocate entirely: The U.S. Postal Services processed nearly 36 million address changes alone in 2020.1

It’s clear Covid-19 accelerated in the U.S. what was a structural rotation from higher-tax, higher-cost states to cities and towns that experienced a boom of sorts as the quality of life, education and housing had been on the rise for years. My colleagues in Accenture Research and I partnered to look at these developments in greater detail to separate signals from noise as people and their assets migrate from traditional financial hubs and explore the associated impact.

We examined this phenomenon through an investor, business, talent and regional lens to glean insights and create a barometer for measuring the potential impacts on the wealth management industry, with assets that are potentially in motion. We also explored the correlation between downward economic pressures in regions that are traditionally and historically important to the financial services industry and the migration to the South and the West.

We believe wealth management firms will have to find new ways to balance migration surges to effectively manage the current client base and attract new customers. For example, if Florida continues to see 845 new residents daily , and each has a hypothetical $250K in assets, the state could see hundreds of millions of inflows every day until 2025.

Follow the Money (and the Lifestyle): Investor Migration Trends

It’s important to note this isn’t a net new trend: 2020 U.S. Census data shows a dramatic shift in population from the North to the South over the past decade: 62% of the U.S. population now resides in the Sun Belt, while the Midwest and Northeast’s population both fell by 7% during the same time. Florida surpassed New York as the country’s largest state,2 with its population surging at twice the rate for the rest of the country over the past ten years.3

And with good reason: Florida is a comparatively inexpensive place to live (I’d be remiss if I didn’t mention the weather). For example, New York has the highest overall tax burden of any of the 50 states (12.79%). Florida, along with a few other states, has an estimated 50% lower tax rate.4 Looking ahead, New York and California could be viewed less favorably among wealthier residents if President Biden’s planned tax reforms become law, with a capital gains rate as high as 52.22% and 56.7% respectively, for those earning over $1 million in a year.5

Family dynamics matter too, as housing and education influence where people are choosing to live. The average home cost in the South and the Midwest is over $100K lower than the U.S. average and over $200K lower on average than homes in the Northeast and the West.6 While the majority of the nation’s best schools continue to be in the Northeast and West, Florida outranked New York in the best high school category (6th compared to 10th, respectively).7 Texas is attracting attention too, with tax advantages, wide-open space and a can-do attitude that mitigates some potential drawbacks like infrastructure and healthcare.8

Follow Their Money: Wealth Management Firm Migration Trends

Asset and wealth managers are by and large following their investors and are relocating to new places. The economic fundamentals driving clients to the South are attractive to firms and relationship managers alike. Tax advantages are particularly compelling: a New York-based hedge fund manager earning $10 million a year pays $1.1 million in taxes in New York, compared to $400 thousand annually in Florida.9

Taken together, I believe the writing is on the wall: increasingly, firms are looking toward a “borderless” talent model that would allow them to be located anywhere; and some financial services executives and firms alike are likely considering how to better align strategy to talent in the post-COVID landscape. Some might be using these uncertain times even to make a fresh start—personally and professionally. Our recent return to work survey found that many financial services firms are reducing office space and developing more fluid relocation strategies with smaller headquarter footprints in the traditional financial services industry-dominant areas like the Northeast.

To Stay or To Go?

The signals are clear, the actions for firms are less so: follow investors or stick closer to home? Can you retain your client from thousands of miles away while acting on local prospects and referrals? How can you assess the overall impact once the school year and bonus season ends?

Lower costs, a more fluid workforce and an attractive tax schema can be enticing, particularly in light of potential inflation and market volatility. As clients put a stake in (new) ground at an increasing rate and in a somewhat predictable direction in search of a better quality of life and cost of living, financial services firms will to examine their own motivations and costs or benefits to make the best decisions for the business–and the people who work in it.

I’ll plan to add another lens and look at this data again in the coming weeks.

In the interim, let me know what you think and reach out if you’d like to explore the data in greater detail.

Special thanks to Matthew Haggerty, Accenture Manager – Capital Markets Research, for leading this trends analysis and contributing to this blog.


1Postal Facts,” United States Postal Service, retrieved 05 2021
2Census 2020: First Results Show Near Historically Low Population Growth and a First-Ever Congressional Seat Loss for California,” Brookings Institute 4/26/2021
3 Tech Jobs, Sun, and No Income Tax: Experts Explain why Florida is Poised to Keep Growing Even After the Pandemic,” Business Insider 5/02/2021
4Tax Burden by State,” WalletHub 3/31/2021
5Biden Eyeing Tax Rate as High as 43.4% in Next Economic Package,” Bloomberg 4/22/2021
6 Accenture Analysis and World Population Review, retrieved 05/2021
7 How States Compare in the 2021 Best High Schools Rankings,” U.S. News and World Report 4/21/2021
8 “Health Care Rankings,” U.S. News 2021
9Hedge Funds Are Ready To Get Out Of New York And Move To Florida,” Private Wealth 5/20/2021