Rupert Baron, former CEO of Rathbones, sat down with Communify to discuss how wealth management is rapidly changing, with trends driven by powerful shifts in the economy, technology, and client demographics. It's an environment where the old rules are out the window, and if you're not adapting, you're getting left behind.
Today's advisors are facing a moment of truth: a wave of both massive opportunity and serious disruption. You can either embrace the change and come out stronger, or stick to the status quo and watch your competitive edge disappear. Even the biggest names in the game aren't safe.
So, what’s the key to navigating this new reality? You've got to understand exactly what's at play. And who better to learn from than the people on the front lines?
Rupert Baron, former CEO of Rathbones, sat down with Finextra Pro at the Communify Insights Experience in London, sharing what's happening in the wealth management space. Below are the major takeaways, combined with a few extra insights and stats.
4 Key Wealth Management Trends to Watch in 2025
1. Industry Consolidation: Get Bigger or Get Busy
Firms are getting serious about efficiency and cutting costs, and that means one thing: consolidation. A massive 81% of wealth management firms are now looking at strategic partnerships, mergers, and acquisitions (M&A) to expand what they can offer, according to PwC.
By combining forces, firms can leverage economies of scale and get a major leg up. 2024 was a record-breaking year for M&A deals, according to Fidelity. But here's the kicker: private equity is fueling this fire. PE-backed deals made up an incredible 89% of all transactions in 2024, a huge jump from just 39% in 2019.
2. The AI Revolution is Here
If you're still debating the power of artificial intelligence, you're already behind. Wealth managers are not just aware of AI; they're already figuring out how to use it to drive growth. A PwC report found that 80% of asset and wealth managers believe AI will increase their revenue.
The use cases are many: from hyper-personalized client service and predictive analytics to smart risk management.
Rupert Baron even talked about using AI to detect client vulnerability, spotting conversational patterns that reveal a client's fears or insecurities. Machine learning is not about replacing the human element but making it smarter. Using AI to better understand your clients means you can deliver a far better experience.
3. The Great Wealth Transfer: Time to Court a New Generation
The average age of wealth management clients is on the rise. Most are in their 60s, and as Rupert pointed out, they're approaching a time when they'll start withdrawing funds and passing on their wealth.
This is the Great Wealth Transfer, a tidal wave of an estimated $84 trillion that's expected to flow from Baby Boomers and the Silent Generation to Gen X, Millennials, and Gen Z over the next few decades. The big problem? A stunning 81% of recipients plan to ditch their parents' advisors.
Firms need a new game plan for engaging younger generations. As Rupert suggests, advisors should be targeting those in their 40s and 50s now. If you wait until they inherit, it'll be too late.
4. Fragmented Data's Reign is Over
For decades, the wealth management industry has been plagued by a nasty problem: fragmented data. Incomplete, inaccurate data scattered across multiple systems made it nearly impossible to get a clear picture of anything.
But the old excuse of "it's just the way it is" is no longer valid. Thanks to cutting-edge AI and robust fintech platforms, these data challenges can finally be put to bed.
Platforms like Communify are leading the charge. Communify and its suite of AI-powered digital apps pull data from all your disparate systems into a single source of truth, giving you the intelligent insights and analysis you need to move forward.
Understand the Trends, Own the Future
The wealth management industry is at a crossroads. Powerful forces like consolidation, the rise of AI, and a huge demographic shift are reshaping the landscape.
Success won't be about luck; it will be about action. The winners will be the ones who proactively modernize their technology, embrace new business models, and deliver a more personalized, data-driven experience for their clients.
As Rupert Baron so fittingly put it, here's the final word on wealth management trends:
"Embrace AI. Because if you don't, your competitors will."
