Just one in three asset and wealth management firms consider themselves “good innovators” despite the need to adapt to shifting regulatory regimes, liquidity pressures and AI adoption, according to Alpha Financial Markets Consulting’s Asset & Wealth Management Outlook report for 2025.
The report, which highlights the key trends and challenges facing asset & wealth management firms, found the four most prominent industry trends this year are integrating AI solutions, converging public and private markets, driving operational efficiency, and maintaining regulatory responsiveness and agility.
With AI adoption and expansion into private markets shaping the industry, Alpha FMC said the companies embracing transformation will be best positioned for the future.
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Joe Morant, Alpha FMC’s global head of asset & wealth management consulting, said firms were tested by rising interest rates and regulatory changes in 2024, but asset and wealth managers proved resilient.
“As we move into 2025, the landscape remains shaped by persistent geopolitical tensions and economic uncertainties,” he said.
“While firms that embraced transformation in recent years have demonstrated resilience, the coming year will test their ability to sustain growth amid evolving market, client, and regulatory expectations.
“The acceleration of digital innovation, particularly around Artificial Intelligence (AI), automation, and digital assets, continues to unlock efficiency gains and competitive advantages. However, firms must balance opportunities with a corresponding awareness of risks, ensuring that technological adoption aligns with strategic priorities.
“We expect 2025 to be a year of measured progress, where firms with strong operational foundations, adaptive strategies, and a clear client focus will be best positioned to navigate complexity and seize emerging opportunities.”
Public and private markets converging
Alpha FMC noted institutional and retail investors continue to seek greater access to alternative assets, pushing asset managers to converge private and public market investments.
Some 60% of firms are looking to expand their private markets offering in the next year, targeting strategies that balance cost, complexity and speed to market.
Meanwhile, asset and wealth managers are turning their attention to retail investors, launching active ETFs and retail-oriented private markets products to expand their addressable market.
Nick Fienberg, global head of alternatives consulting at Alpha FMC, said: “The lines between private market asset classes are blurring as firms expand their offerings to meet client needs.
“Disruptions from Fintech and traditional asset managers entering the alternatives space are driving structural shifts. AI and automation are key to improving operations and scalability.
“In this dynamic environment, innovation and adaptability will be critical for long-term success.”
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AI remains a dominant trend in the industry, with asset managers increasingly embracing the technology in their investment processes and using AI tools to improve client experiences.
“AI has yet to become the disruptor it is often hyped to be, but its potential impact cannot be underestimated,” Alpha FMC’s Morant said.
Firms are also using tech to increase scalability and cost efficiency, by using automation and infrastructure upgrades to support larger asset bases.
Industry CIOs focus on better private markets data
According to the outlook, industry CIOs are focused on strengthening investment decisions with non-traditional data sources, such as ESG signals, and scaling exposure to direct lending and structured credit solutions amid banking sector shifts.
In private markets, CIOs are leveraging advanced analytics in order to improve valuations and deal sourcing.
“In 2024, global asset management CIOs navigated an increasingly complex investment landscape marked by persistent inflationary pressures, geopolitical risks, and rapid technological advancements,” said Alpha FMC.
“Many CIOs successfully adapted to evolving market dynamics by integrating AI-driven analytics into portfolio construction, enhancing risk management frameworks, and refining ESG implementation strategies amid regulatory scrutiny.
“The shift toward private markets and alternative investments accelerated, with CIOs optimising liquidity management and improving operational efficiencies through digitisation. A key development was the broader institutional adoption of systematic investing in fixed income and alternative asset classes, leading to improved alpha generation and risk-adjusted returns.
“Despite volatility, CIOs delivered strong performance by leveraging data-driven decision-making and innovative investment structures.”