19 December 2024
Key Trends Reshaping the Wealth Management Market in 2025
The financial world never stands still and 2025 is shaping up to be a truly significant year. We're seeing a powerful mix of advanced technology, increased regulations and changing client expectations all coming together to transform the wealth management landscape. At Infront, we’re monitoring these changes closely and have identified key trends and predictions that we expect to drive our industry forward in the coming year.
Clients Want it Now: The Rise of Real-Time Demands
We live in an “instant” world and clients expect the same from their wealth management platforms. They want real-time portfolio updates, on-the-go analytics, personalised recommendations and instant alerts.
Big data and AI are essential for delivering this kind of experience. By analysing mountains of data, wealth managers can offer tailored insights and empower clients to make informed decisions.
This demand for instant access and personalisation is pushing the industry towards a more data-driven, responsive approach. Infront's platform gives wealth managers the tools and data they need to meet these rising expectations, offering real-time market alerts, smart analytics and personalised insights.
Embedded Finance: Wealth Management, Everywhere
Embedded finance – where financial services are integrated into non-financial platforms – is rapidly gaining momentum. We're seeing wealth management services popping up in all sorts of places, from e-commerce sites to lifestyle apps.
This blurs the lines between traditional wealth management and other sectors, creating new opportunities for partnerships and innovation. By embedding these services, businesses can boost customer engagement and find new ways to generate revenue.
Regulation and ESG Integration: A New Era of Responsibility
Regulators worldwide are stepping up their efforts to shape the future of finance, pushing firms towards greater transparency and accountability. This regulatory pressure coincides with rising consumer demand for ethical and sustainable practices.
Wealth management clients are no longer solely focused on financial returns; they are also prioritising environmental, social and governance (ESG) factors. As a result, we’re seeing a real need for better ways to measure ESG performance and a strong push towards responsible investing.
By the end of 2025, ESG will be fundamental to wealth management strategy, rather than optional. At Infront, our partnership with Clarity AI gives wealth managers access to top-notch ESG and green investment data, making it easier to integrate these crucial elements into investment strategies and client portfolios.
Decentralised Assets: Changing the Status Quo
The rise of decentralised finance (DeFi) is challenging traditional banking models. DeFi offers investors greater control over their finances and data, presenting an alternative to conventional products. Meanwhile, the tokenisation of real-world assets, such as art and real estate, is also gaining traction, enabling fractional ownership and increased liquidity, for new investment opportunities.
While traditional wealth management products aren't going anywhere, the rise of DeFi and tokenisation have become impossible to ignore, forcing established players to think hard about how they'll fit into this evolving space. In fact, adoption of DeFi by financial institutions is increasing, with many institutions exploring ways to integrate DeFi into their existing infrastructure. This suggests that the future of finance may involve a hybrid model, combining the strengths of both traditional finance and decentralised assets.
Changing Business Model: Technology Meets Personalisation
Fintech startups and new technologies have shaken up the traditional wealth management model. Clients today demand more from their advisors – they expect a truly personalised experience. This is especially true for younger generations, with a recent survey by Gartner showing that Millennials place a significantly higher value on cutting-edge technology when choosing a wealth manager. To stay competitive, firms must embrace these new technologies, offer bespoke services and explore fresh business models. This includes rethinking their fee structures, moving away from traditional AuM-based models towards fee-based or even subscription models that offer greater transparency.
This means leveraging data analytics to really understand client needs and implementing agile methods to quickly deliver innovative solutions. The traditional advisor-client dynamic is changing, with technology playing a bigger role in improving communication, boosting efficiency and delivering a better overall client experience.
Looking Ahead
These trends are all connected. The push for transparency and ethical practices fuels ESG integration. DeFi is shaking up traditional wealth management and giving more power to investors. Meanwhile, the demand for real-time experiences is driving the use of data analytics and AI. Ultimately, the future of wealth management hinges on empowering advisors and enhancing client experiences by effectively balancing technology with personalised service. As we head towards 2025, we expect to see even more innovation in wealth management, with these trends leading the way. At Infront, we’re committed to helping wealth managers navigate this dynamic landscape by providing the tech, data and insights they need to thrive in the years ahead.
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