6 Wealth Management Trends to Watch

An increase in cybersecurity, focus on client experience, the thriving AI and robo advisors, or a major shift in asset allocation strategies—these are just a few of the most important wealth management trends for 2024/2025. In this article, we shall discuss them (and a few more!) in more detail, so read on to find out what the future holds for the wealth management industry.

‍

Wealth Management Trends for 2024 and 2025

‍

Without any further ado, let’s look into the current trends in wealth management, especially the digital ones. If you want to compare them with the previous year’s trends, see our article on the top focus for wealth managers in 2023.

‍

Cybersecurity

‍

Investors and stakeholders are becoming much more focused on cybersecurity in wealth management. This leads to related companies implementing better, stronger measures to prevent data leaks.

‍

At the same time, the regulations get stricter due to such concerns. What will be the result of this? We believe that digital data security will become a priority for the wealth management sector in the upcoming years.

‍

Client Experience

‍

The trend of putting a lot of effort into client experience has been observed in numerous industries for quite some time, and wealth management is quickly catching up. Here, it is dictated mainly by the shift in the types of investors currently looking for such services.

‍

With the new generation of high-net-worth individuals entering the market and assets being transferred from Baby Boomers to Millennials, wealth management firms need to manage new client expectations and find ways to meet them. This often means switching to digital channels to provide seamless, quick, and convenient remote services while maintaining the high standards established for the previous generations.

‍

This naturally increases the need for complex IT solutions that can handle this digital transformation. Wealth management platforms are no longer an asset; they become a must for businesses that want to remain competitive. After all, only such specialized tools enable wealth managers to maintain high security standards and embrace the power of digitization without turning their service into an inconvenience for the clients.

‍

AI and Robo-Advisors

‍

Artificial intelligence and its products also revolutionize wealth management, and their implementation should become much more common in the upcoming months. AI enables wealth management firms and banks to analyze big data, draw conclusions from it, and manage portfolios more efficiently, quickly locating and utilizing new investment opportunities. On the other hand, robo-advisors have become a threat to the whole sector since clients are likely to turn to them for their convenience and data-driven approach.

‍

This technology also impacts the way firms communicate with their clients. AI-powered data integration enables the connection of different channels to adopt the opti-channel approach. Gen-AI-powered bots give wealth managers an opportunity to tailor their communication to each particular client’s needs with just a few clicks. Artificial intelligence is a new, mighty weapon in the arsenal of wealth management, and related businesses realize that they need to equip themselves with it to remain attractive. 

‍

Asset Allocation Strategies Are Changing

‍

Asset allocation adjustment is a natural process in wealth management, though what makes it a true trend in 2024 is the fact that over half (57%) of investors plan to implement it in 2024, at least according to the Bloomberg Markets Live Pulse survey quoted by Suzanne Woolley.

‍

Currently, a lot of investors turn to AI-related investment opportunities. Moreover, there is a clearly visible shift towards fixed-income investments and equities, though stocks will also remain popular. This is caused by two factors:

‍

• the rapidly changing markets, especially with the introduction of generative AI,
• the previously mentioned generational shift.

‍

Cryptocurrencies

‍

Cryptocurrencies aren’t anything new, but they will gain power and popularity in the upcoming months. Again, this is caused by the wealth being passed down by Boomers, and the younger generations: Millennials and Gen X are much more favorable towards this type of assets.

‍

Social Media

‍

For previous generations, using social media for investment decisions was unacceptable or strange. Yet, according to the latest LSAG Data & Analytics report, this has changed for younger investors.

‍

The report found that 33% of Millennials and 21% of Gen X claim to use social media to make investment decisions, with YouTube and X being the most frequently mentioned ones. This leads to yet another wealth management trend—firms need to establish their presence on social media to reach out to and appeal to the younger generations. This can already be observed among external wealth managers, and it is a trend that we cannot omit—either you follow it, or you will miss out on a large chunk of your potential clients.

‍

Conclusions

‍

As you can see, most of the current trends in wealth management are dictated by the generational shift. You need to adapt to the new circumstances to attract a younger audience, and acquire new clients. At the same time, you need to implement innovative, robust technologies like AI and excellent cybersecurity measures, since they will help you build trust and deliver high-quality services. Undoubtedly what we experience now is a kind of revolution, and your goal is to emerge from it victorious by embracing the changes rather than resisting them.

‍

You may also be interested in reading: How to Ensure Profitability When EAM Fees Are Shrinking.

‍