BOSTON, March 25, 2025 – Nearly six in 10 (59%) professional fund selectors from major U.S. wealth management firms cite high valuations and inflation as their top portfolio risk concerns in 2025, according to survey findings released today by Natixis Investment Managers (Natixis IM). These concerns topped a wide-ranging list of political, economic, technological and business challenges.
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%. By comparison, investment professionals surveyed in Europe excluding the UK project 11.2% in AUM growth and those in Asia forecast 8.3%.
To achieve their AUM growth targets in what could be a volatile period, 48% of U.S. wealth managers emphasize the need to move clients beyond cash, while 45% also prioritize expanding service offerings.
Natixis IM surveyed 170 U.S. fund selectors responsible for investment decisions at private banks, wirehouses, RIAs, RIA aggregators, and other advisory firms, collectively managing $17.5 trillion in assets.
“Following a year of contentious national elections in the United States and other major economies, wealth managers are moving to adapt to policy changes, economic uncertainty, technological advances, and industry consolidation,” said Dave Goodsell, Executive Director of the Natixis Center for Investor Insight. “To secure both short-term asset growth and long-term prosperity, wealth managers recognize that broadening their service offerings and delivering more sophisticated investment options to clients will be critical.”
Inflation fears re-emerge, but some optimism remains
While 80% of U.S. wealth managers remain optimistic about 2025, inflation concerns have resurfaced, driven by uncertainty around new U.S. policies. Half of U.S. managers view inflation as the biggest economic threat, followed by geopolitical conflicts (35%), escalation of wars (32%), U.S.–China relations (31%), and a tech bubble (27%). With CPI coming in 3% higher on a one-year basis in January, their concerns may have been well placed.
Despite this, almost 58% of U.S. managers anticipate a soft landing for the economy, while 33% expect no landing. Most (79%) predict a moderate interest rate-cut cycle, with 54% expecting interest rates to settle at 3.5–4.49%, 30% expecting 2.5–3.49%, and only 10% expecting rates to exceed 4.5%. In response, 54% of wealth managers are recommending longer-duration investments.
While 66% of U.S. wealth managers worry that Trump’s policies could drive inflation, there is a sense of optimism among some of his policies. Over eight in ten (81%) anticipate increased M&A activity, and 69% expect growth in domestic manufacturing. Additionally, 68% believe tax cuts and spending boosts will fuel a market rally, while 67% foresee regulatory shifts leading to innovative investment products.
Expanding investment offerings
Despite uncertainties with the new U.S. administration, almost three quarters (74%) of U.S. wealth managers believe clients will be more willing to move out of cash, which almost half (48%) of U.S. wealth managers see as an important factor in growing their business. While they aren’t making drastic allocation shifts, they are looking to add their investment offerings, including:
- Active 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. These ETFs will primarily support expense management (43%), core holdings in model portfolios (42%), and thematic investments (41%).
- Private Assets: Wealth managers are increasing their recommended allocation to alternative investments, particularly private assets, from 12.8% to 14.5% in 2025. More than half (55%) intend to add private credit offerings, while 47% will introduce private equity options. Three-quarters of wealth managers incorporate private market assets for diversification, though 66% cite liquidity concerns as a challenge.
- Direct Indexing: Nearly half (49%) of U.S. managers plan to introduce direct indexing within the next two years.
- Thematic Funds: Thirty-seven percent of managers aim to add thematic strategies, with top themes including artificial intelligence/robotics (85%), cloud infrastructure (57%), and biotech/healthcare innovation (46%).
Driving efficiency through model portfolios and artificial intelligence
As wealth managers broaden services, they are seeking to strengthen efficiency and client retention. A significant 82% of U.S. asset managers use model portfolios, with 91% agreeing they streamline investment processes. Additionally, 85% believe they provide a more consistent investing experience, 84% say they help clients stay invested during uncertainty, and 81% report they help manage risk. More than half (55%) plan to allocate more client assets to model portfolios over the next year, including tax-managed strategies (40%), tactical allocation models (35%), and high-net-worth models (35%).
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. 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.
In terms of implementing AI, U.S. wealth managers are largely exploring or in the early phases of using it in office productivity (74%), investment research (73%), risk analytics (71%), client materials development (65%), portfolio optimization (63%), investment operations (61%), customer service (51%), and client acquisition (49%).
The survey of U.S. fund selectors is part of a larger survey of 520 wealth industry professionals across Asia, Europe/EMEA, North America and the UK.
A full copy of the report on the global findings from the 2025 Natixis Investment Managers Wealth Industry Survey can be found here.
