Trending
Uncertainty has been the name of the game through the first three-and-a-half months of 2025 and while that’s weighing on clients’ minds, advisors and the wealth management community aren’t taking the situation lightly.
In fact, many are using these turbulent times to press ahead with growth initiatives, not scale back. That relevant on multiple fronts including the following factoid from a new Natixis Investment Managers survey: “U.S. fund gatekeepers project an average growth in assets under management (AUM) of 17.6% in 2025, significantly higher than the global average of 13.7%.”
That’s an ambitious goal, particularly when accounting for the geopolitical/macroeconomic storm – one that largely started in the U.S. – market participants are contending with. Realizing assets under management growth this year isn’t impossible, but it will require clarity and some out-of-the-box thinking. Advisors are getting that message.
They’re also understanding that some old guard approaches and prosaic wisdom may have limited utility today when it comes to reaching growth targets, meaning that’s essential expand offerings and question the relevance of advice from bygone eras.
A Good Time to Bolster Suite of Offerings
Advisors and wealth managers have long heard about the drive to foster holistic practices, but the road to assets managed growth can should also focus on expansion of investment options. Fortunately, that includes some familiar asset classes, including actively managed ETFs.
“Half of U.S. managers plan to introduce active ETFs within two years. A significant 81% believe their ease of trading is a major improvement over mutual funds,” according to Natixis. “These ETFs will primarily support expense management (43%), core holdings in model portfolios (42%), and thematic investments (41%).”
The asset manager also points out that concepts such as direct indexing and thematic funds are also on the wealth management community’s radar regarding expansion of services. Not surprisingly, so are alternatives and private assets, which are in demand among clients.
“More than half (55%) intend to add private credit offerings, while 47% will introduce private equity options,” observes Natixis. “Three-quarters of wealth managers incorporate private market assets for diversification, though 66% cite liquidity concerns as a challenge.”
Efficiencies Can Drive Growth, Too
One reason for optimism regarding wealth management industry growth this year is that it can be driven by efficiencies – something advisors can leverage to their benefit regardless of what’s happening on a macroeconomic basis.
Arguably, the current climate could be conducive to embracing model portfolios – a prime source of making practices more efficient. If nothing else, model portfolios mitigate the impulse to fiddle with client portfolio during these calamitous times. Likewise, artificial intelligence (AI) remains front-end-center in the wealth management efficiency conversation.
“Artificial intelligence is also playing a growing role. About 42% of U.S. wealth managers see AI as a key growth driver, with 70% believing it will integrate more services and 60% seeing potential for uncovering investment opportunities,” concludes Natixis. “At the same time, U.S. wealth managers also recognize that not implementing AI could leave them behind, with half saying they fear competition from disruptive tech-driven entrants.”
Related: The Untapped Opportunity: Are Advisors Missing Out on Single Investors?