The Macro Trends Shaping the Future of Financial Advice

As an adviser, how confident are you that your technology stack is setting you up for success? According to a study from AdvisorHub, a staggering 92% of financial advisers report they would leave their current firm if technology hinders their productivity. Even more concerning, 44% say they've already made a switch due to inadequate tech.

These stats and others were shared by FE fundinfo’s Head of Strategic Accounts Matt D'Souza in our very first Q1 Market Outlook Overview, a new FE fundinfo quarterly series set out to underline the key trends and shifts shaping the investment space. This debut edition underscores the breakneck pace of digital transformation happening in wealth management right now, where the tools that you leverage are as important as the soundness of your financial advice to your clients, if not more.

"Digital transformation is no longer optional—it's a key driver of success in financial advice," he emphasises. "By investing in modern, integrated technology solutions, [firms] can enhance client satisfaction and retention, improve operational efficiency and empower [their] advisers with tools that boost productivity and engagement."

But while technology may be the most immediate force reshaping the industry, it's far from being the only one. Drawing on over 30 years of experience and partnerships with more than 4,200 financial advice firms, FE fundinfo has identified five megatrends poised to radically transform the wealth management landscape by 2025:

The Shift to Holistic Financial Planning 

Breaking from the longstanding norm of hyper-specialisation, demand for more holistic advice has surged by 60% in the past five years (McKinsey). No longer content with advisers who only manage investments, clients now seek out partners who deeply understand their life goals, values and emotional needs. They look for a dedicated partner who can offer guidance during major life transitions. This can manifest as holistic planning support that integrates budgeting, retirement planning, tax optimisation and legacy planning. 

To meet this demand, advisers must expand their services to deliver comprehensive financial guidance and integrate tools for advanced planning, behavioral coaching and more. With Nexus, disparate systems and data sources connect through one intuitive interface to streamline holistic planning and enable advisers to craft tailored, tax-efficient financial roadmaps for each client. 

The Next Generation of Wealth 

Over the next two decades, an unprecedented £63 trillion will pass from Baby Boomers to younger generations. And this emerging client base invests differently than their parents.

The technology divide is significant: 83% of those aged 25-34 feel comfortable with AI-assisted financial advice compared to just 33% of over-55s. Nearly 80% of young adults now turn to social media platforms for financial guidance, preferring mobile-friendly platforms, video calls and seamless digital experiences rather than traditional advisory models.

This, says D'Souza, "highlights a massive shift towards digital financial engagement, where convenience and accessibility are non-negotiable."

And younger investors bring different expectations to the adviser relationship. They seek advisers who understand their personal values and life goals, not just their financial needs. The next generation of clients prioritises sustainable investments and flexibility in financial planning, expecting hyper-personalised guidance that aligns with their individual values rather than generic advice. While 65% of Millennials and Gen Z investors still believe professional financial advice is crucial for success, they expect this advice to be delivered in ways that feel authentic and personally relevant to their unique circumstances.

Evolving Investor Preferences 

ESG investing continues its meteoric rise, while long-term asset funds (LTAFs) are also gaining significant traction. According to McKinsey, a full 78% of UK and US asset managers are considering launching LTAFs within the next three years. Meanwhile, the FCA is working to enhance transparency and accessibility for ESG investments. Advisers who can proactively navigate this changing regulatory landscape and align with clients' long-term priorities stand to benefit. 

Constantly scanning the regulatory horizon, FE fundinfo helps advisers stay on top of evolving requirements, automate compliance tasks and match clients with suitable ESG and long-term investment products.

The Growing Role of Artificial Intelligence

AI is actively reshaping the day-to-day work of advisers, from automating admin tasks to enhancing decision-making to enabling hyper-personalised client experiences. By 2027, the AI in Wealth Management market is projected to grow at a CAGR (compound annual growth rate) of 21.17%. 

But AI is only as powerful as the data it's trained on, D'Souza cautions. "High-quality, structured datasets are essential for accurate insights. This is where advisers need to invest—not just in technology, but in ensuring their data is clean and comprehensive." This remains especially true, as consumer trust in AI-powered solutions remains lukewarm. 

While clients might be comfortable with AI handling routine transactions like "topping up an ISA by a thousand pounds," D'Souza notes they remain "hesitant to fully trust AI for major financial decisions", such as investing their full allowance or making significant pension fund changes. For near-term practical application, advisers can leverage these tools to meet regulatory requirements. AI solutions today can help "manage risk and ensure reports are always accurate and compliant, by pulling them from up to date, verified data sources, and storing all the due diligence on client advice.”

With a track record for comprehensive analytics and automation, FE fundinfo’s Nexus platform remains on the leading edge to help advisers generate data-driven insights and create highly personalised client experiences at scale.

The Digitalisation of Everything 

Which brings us back to technology. Your team's ability to perform at its best depends on the tools you rely on. Inefficient or outdated technology not only slows processes but also creates conditions for frustration and turnover.

"The most exciting developments aren't just about automation," D'Souza explains. "We're seeing AI and digital tools enable entirely new ways of understanding and serving clients. The technology isn't replacing human advisers, but it is amplifying their capabilities and allowing them to deliver the comprehensive guidance that today's clients increasingly demand."

To dive deeper into this transformation and explore how solutions like Nexus can help you lead it, watch the on-demand recording below.