Wealth management juggernaut AMP (ASX: AMP) has bucked the negative trend which has seen the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) fall again today. While the index by early afternoon did recover much of its earlier losses to be down just 0.2%, AMP has steamed higher, trading up 0.9% in early afternoon trade.
While soft financial markets are rarely helpful to wealth management firms, smaller firms such as SFG Australia (ASX: SFW) and WHK Group (ASX: WHG) are much more likely to struggle than their larger peers. Indeed, opportunities for larger players such as AMP, IOOF (ASX: IFL) and Challenger (ASX: CGF) can present themselves at such a time either through consolidation of smaller and weaker competitors or through clients being drawn to the perceived safety of larger, more established managers.
Just like the banks, some of the larger wealth managers have robust earnings which can sustain their dividends; they also often boast very strong balance sheets. With firms such as AMP trading on a dividend yield above 5%, investors may want to take a closer look at the sector.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.