Wealth Management Industry Outlook

Wealth managers’ growth estimates for 2025 may come out at an average of 13.7% globally, but that number varies widely by region. Those in Asia estimate AUM growth for their firms at just 8.3% this year, which may be one part a reflection of lower expectations for market returns and another part concern that China’s growth challenges could impact the region at large.

Wealth managers in the US post more aggressive estimates, forecasting average AUM growth of 17.6%, a figure that likely reflects both their expectations for market appreciation and a payoff from efforts to win new clients and earn a larger share of wallet from current clients. Lower estimates in Europe (11.2%) may reflect concerns over the impact of slowing growth and lingering inflation.

Average expectations for AUM growth

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Factors critical to wealth managers’ AUM growth

No matter the region, expanding the service offering is a key objective for wealth managers in 2025. In fact, 56% of those surveyed cite this as an important growth factor. In terms of what that offering will look like, firms in each region are tailoring their capabilities to the needs and tastes of their client base.

Growing the base is another concern, and almost half (48%) say it will be important to tap new client segments for growth. The challenge is all the more pressing as the industry looks at an aging client base and finds ways to replenish their roster with younger investors. Faced with the Great Wealth Transfer, 34% see it as a threat to their business, while 34% say it’s an opportunity to win new assets.

Many are looking to tech for solutions that allow them to better personalize services, streamline segmentation efforts, and address the preferences of a new generation of clients. Overall, 44% of wealth managers say harnessing new technologies will be an important factor in their success.

In Asia, wealth managers are leveraging technology both to offer digital wealth management platforms and apply advanced analytics to personalize client experiences.

In Europe, firms are implementing a more holistic family office service model integrating financial planning, estate planning, and multi-generational wealth protection services.

In Latin America, fintech also factors into growth plans across the region, especially solutions that help address the needs of younger, digital-savvy investors.

In the US, wealth managers are focused on offering more personalized services such as tax management with direct indexing strategies and applying data insights to enhance customer relationship management.

In the UK, analysts say their firms are expanding service offerings by incorporating digital tools, focusing on personalized financial planning, and providing greater transparency around fees.

Where artificial intelligence fits in wealth managers’ growth plans

After witnessing the rapid development of generative artificial intelligence (AI) models over just a few short years, firms are looking at new technology in three key areas: Most important today is tapping into the investment potential of AI; deploying AI to enhance their internal investment process is another immediate opportunity; and many are already testing AI to see how it can enhance business operations and client servicing.

The investment potential of AI

In terms of opportunity, 79% of wealth managers say AI has the potential to accelerate earnings growth for the next 10 years. Their estimate may not be far off: Recent research shows that as the world has realized the potential of the technology, the market size for AI grew from $93 billion in 2020 to $243 billion in 2025. By 2030, the AI market is expected to reach $826 billion.¹

Add to it the effect it could have for companies that leverage AI, and 64% say artificial intelligence represents investment at a scale never seen before. In hopes to focus on the AI opportunity, 58% are actively seeking AI-themed investments. But even as wealth managers work to help clients capitalize, 78% of them are sure to remind investors that AI poses as many risks as opportunities.

The AI Screen Test: Take II

Donut chart showing the AI screen test of movies

Investment personnel at wealth managers have an overwhelmingly positive view on the potential for AI. Asked which movie robot best serves as the face of artificial intelligence, they chose the bots that support humanity.

Despite the optimism, some nagging suspicions remain. Among the 520 individuals surveyed, 30% worry that AI could bring about the end of civilization as we know it.

AI finds a place in the investment process

AI technology is winning over investment teams, and 58% say their firm has already implemented AI tools in their investment process. The highest concentration of early adopters can be found at wealth management firms in Germany (72%), France (69%) and Switzerland (64%).

A higher level of adoption in France is likely linked to a national policy put in place in 2018 to make France an AI superpower. As a result, investment in AI represents 30% of national venture capital investment, which ranks ahead of the US (28%), the UK (25%) and China (17%).²

Wealth managers envision AI supporting both sides of the risk/return equation. Almost seven in 10 (69%) say AI will enhance the investing process by helping them to uncover hidden opportunities. Another 62% say AI is becoming an essential tool for evaluating market risks. The potential is so great that 58% say firms that do not integrate AI will become obsolete.

Wealth managers envision AI supporting both sides of the risk/return equation

It is clear gatekeepers and analysts know they need to maintain an investment edge, especially when 45% see relative performance as either a major (13%) or minor (32%) business threat. While they are still in the early stages of adopting AI, 36% see it as an opportunity to generate better investment outcomes for clients.

Putting AI to work in the business

Beyond the investment opportunities and portfolio management applications, wealth managers also anticipate that AI will impact the service side of the business. Overall, 77% say AI will help meet their growth goal of integrating a wider array of services. As they look to service a bigger and broader client base, 54% believe AI will improve their ability to scale up their capabilities, while 46% think the technology will set them up to better personalize client experiences.

Many also see AI as a tool for helping them set a course for the business, and 42% of wealth managers believe AI will enhance their strategic decision making. Another 38% think AI will help increase profitability. This could be critical at a time when 59% see fee compression as a major (20%) or at least minor (39%) threat. When it comes down to it, only 8% of those surveyed think their firm will derive no benefit from the implementation of AI.

Practical applications of AI in wealth management

While firms see potential, AI implementation is still in its nascency. For many firms, the first steps in applying AI include office productivity (86%), investment research (83%) and performance and risk analytics (83%). But even in these fundamental areas, few have fully integrated AI into the process.

Firms appear to be taking a similar approach to AI in other areas: 79% are applying AI to develop client materials, though only 7% have fully integrated these capabilities in the process. Wealth managers are also deploying AI for investment operations (73%) and customer service (73%). Overall, 12% report they have fully integrated AI for chatbots and similar capabilities into the service model. Another 64% are applying AI toward client acquisition, but as in many other areas of the business, they’re still early in the process.

Managing the investment offering

Technology may have the potential to reshape the industry, but firms face the more immediate challenges of meeting client investment preferences and return expectations. Wealth managers are now tapping a broader pallet of vehicles and asset classes to fulfill client needs. Most notably, they’ve focused on private investments.

Wealth managers’ appetite for private assets unabated

Private assets continue to be a focus in business plans for wealth managers in 2025, as nearly half (48%) say meeting client demand for unlisted assets will be a critical factor in their growth plans.

But wealth managers are split in how access to a limited pool of private assets will actually impact their business: Over one-quarter (26%) say access, or lack thereof, is a threat to their business. Another 37% say access poses no threats. Most confident are the 37% who say private assets represent an opportunity to grow the business.

Product plans call for expanding access to private assets

Overall, 92% plan to increase (50%) or maintain (42%) their private credit offering. With inflation easing and central banks reversing course on interest rate policy, 67% say falling rates strengthen the investment case for private assets. Beyond more attractive yields, private credit has also demonstrated a lower level of volatility and lower loss rates than public bond markets.

Similarly, 91% plan to increase (50%) or maintain (41%) private equity investments on their platforms. While both institutional and individual investors have focused on private equity to fill a range of portfolio objectives in recent years, enhanced return potential remains front of mind. Few among those surveyed see that changing, as 63% say there is still a significant delta in returns between private and public markets. And 69% say despite high valuations, they think private assets are good value for the long term.

While firms remain focused on expanding private assets, wealth managers are also aware of the compliance pressures they can present as lockups, minimums and asset thresholds complicate the picture. This added scrutiny is just a small part of the regulatory concerns that lead 60% to list regulatory compliance as a major (17%) or minor (43%) business threat.

New product structures are helping to ease the pressure. As the democratization of private assets plays out, firms are working to ensure they keep pace, which is one reason 89% say they will add to (29%) or maintain (60%) fund of fund offerings.

Beyond meeting client demands, private assets factor significantly in allocation plans for alternative investments in 2025 (see portfolio strategy section).

Active investments, active ETFs factor prominently in product plans

After a year in which 62% say the active investments on their platforms outperformed passive, it’s not surprising that 90% of wealth managers say they will add to (42%) or maintain (48%) their offering of active investments. These additions may be well timed as 63% of wealth managers say markets will again favor active in 2025.

62% said active investments on their platforms outperformed passive

Calls to up active investments may reflect a more uncertain macro/market environment, as 68% globally and 76% in Asia say active investments are equally effective in preserving assets, as in generating alpha. And with interest rates in flux, 73% say active investments are essential to navigating today’s fixed income environment.

Even still, passive investments continue to factor into product plans with 92% planning to increase (42%) or maintain (49%) index funds on their platform. Fee management is likely one key reason for additions, as 59% say fee compression is either a major (20%) or minor (39%) business risk over the next five years.

Many are finding that Active ETFs help them bridge the advantages of both approaches by marrying the lower fees of passive with the potential to outperform that comes with active. The approach is gaining traction with wealth managers, as 77% globally and 92% in Asia say the ease of trading active ETFs is a significant enhancement, compared to traditional mutual funds.

Globally, 96% of wealth managers plan to increase (49%) or maintain (47%) their offering of active ETFs. Asked which applications these innovative strategies are suited to, 38% cite expense management. In terms of portfolio construction, 33% look at active ETFs as a fit for core holdings, while 31% see the fund structure as well suited to satellite investments around a passive core, making the structure a workhorse for portfolio management.

Thematic investments focus the opportunity set

Among all the applications for active ETFs, the largest number (46%) see the product structure fitting into their plans to offer clients a broader array of thematic investments. In 2025, 91% of wealth managers report their firms will either add to (42%) or maintain (49%) the thematic investments available on their platforms.

In keeping with their focus on the investment potential of the AI revolution, firms are most likely to add AI/Robotics thematic strategies to their platform. Those in North America (85%) and the UK (70%) show the greatest interest in these strategies.

Another 45% report interest in adding sustainable investments as a theme, something 63% in France plan to do. The technology theme runs through additional product plans as 45% are looking to add investments focused on cloud infrastructure, while 40% will up biotech and healthcare innovation strategies, and 27% will add to investments a safety (the physical and digital protection of people and institutions).

Where wealth managers will add to their thematic strategies

Graphic showcasing where wealth managers will focus when additions to their strategies are considered. Number-one is AI/Robotics at 68%.

Separate accounts, direct indexing and tax efficiency

As wealth managers look to deliver a more personalized experience for clients, many see separately managed accounts (SMAs) as a solution for customizing portfolios. Overall, 92% of analysts worldwide say their firm plans to increase (31%) or maintain (61%) the offering on their separate account platforms.

Separately managed account strategies fit well with the needs of higher-net-worth clients, providing the opportunity for customization within strategies and giving the account holder ownership of both the underlying securities and their tax basis. That ownership can enhance tax efficiency for investors in certain jurisdictions, such as the US.

Tax savings may factor significantly in plans for expanding separate account offerings, as 92% of those surveyed say they will also increase (31%) or maintain (61%) direct indexing strategies. Demand for these SMA solutions that integrate taxloss harvesting is greatest in the US, where 49% of those surveyed say their firm will look to add more direct indexing strategies to their platforms.

Model portfolios support move to expand services

As firms look to expand services, manage fees and control risk exposures, many are turning to multi-asset model portfolios. Overall, 84% worldwide offer model portfolios to clients, a 10% increase over the 74% that offered these products in 2020.

That growth is likely to continue in 2025, as 42% say moving clients to models is an important factor in their growth. In fact, half of those surveyed say their firms plan to move more client assets into models during 2025. Meanwhile, another 38% say their firms will add to their model portfolio offerings.

In part, the move to expand the offering is to help clients better prepare for what firms project to be more volatile markets in 2025. Overall, 74% say models help keep clients invested in uncertain times – including the 69% who specify that models keep clients invested during volatile times. When it comes down to it, 80% say models give clients a more consistent investment experience.

As firms look to grow, models help them address not only client needs but also key business needs. Globally, 85% say models help them streamline the investment process, while another 78% say model portfolios are a more efficient way of implementing unified managed accounts for clients.

Ultimately, as firms compete for a larger share of client assets with more comprehensive wealth management services, 64% say that models help advisors deepen client relationships.

Expanding the roster of models and managers

Looking to meet client portfolio needs, 51% of wealth managers say they are looking to add more specialty models to their platform.

Most frequently, they are looking to add tactical allocation models (36%). Built to specific risk criteria, they seek to enhance returns by reserving an allocating of a portion of assets to capitalize on new market opportunities and/or risks. Almost the same number (37%) will look to meet a similar goal by adding allocation models that incorporate liquid alternatives, while another 31% will look to add models focused specifically on providing exposure to alternative investments.

Planned additions to model platforms

Some firms (35%) will turn to these portfolios for thematic investments by adding entire models dedicated to specific opportunities. One-third (34%) will take a similar approach to addressing client preferences for environmental, social, and governance (ESG) strategies.

The industry focus on addressing the needs of wealthier clients is well represented in the 33% of analysts who say their firm is looking to bolster their offering with high-net-worth models that provide a greater level of customization. Closing out the offering are tax-managed models, according to 31% of analysts globally and 40% in the US.

About the survey

The 2025 Natixis Investment Managers Wealth Industry Survey was conducted in December 2024 and January 2025, and included 520 individuals in 20 countries throughout North America, Latin America, the United Kingdom, Continental Europe, Asia and the Middle East.

Disclosure

¹ Generative AI - Worldwide. (n.d.). Retrieved February 24, 2025, from https://www.statista.com.

² Make France an AI Powerhouse, www.elysee.fr [PDF].

The views and opinions expressed may change based on market and other conditions. This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted.

Actual results may vary.

All investing involves risk, including the risk of loss. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

Natixis Distribution, LLC is a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers.

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