Following a volatile year of rising geopolitical tensions and shifting investment markets, the wealth management industry looks ahead at what 2025 may bring and the potential trends impacting the UK wealth and advice sectors.

Reflection and recalibration

The UK wealth and advice industries were kept on their toes last year as a new Labour government came into power, bringing with it new policies that will shape financial planning and investment journeys going forward.

“2025 is set to be a year of reflection and recalibration for the wealth planning industry,” stated Isio Wealth Planning head, Mark Campbell.

“The government’s recent Budget introduced significant changes, from the freezing of inheritance tax (IHT) thresholds to higher capital gains tax (CGT) rates and the inclusion of pensions in estates for IHT purposes from 2027.”

Campbell said that 2025 will be key for unpacking the details of these changes, understanding how they will be administered, and ensuring the sector remains equipped to handle them effectively.

“Without this clarity, it’s difficult for clients to make fully informed decisions - practicalities need to be set out sooner rather than later,” he added.

Despite the changes, 2025 will likely be business as usual, Campbell continued, with the focus being on getting the basics right, with clients needing well-diversified portfolios, appropriate asset allocation, and enough liquidity to weather ongoing volatility.

“The challenge is preparing for these changes while staying calm and focused on the fundamentals - avoiding knee-jerk reactions that could undermine outcomes while ensuring long-term stability,” Campbell said.

The return of global growth

As we move into the second half of the decade, 2025 promises to be “another year of change, with plenty of twists and turns”, not least with the return of Donald Trump as US President, according to Evelyn Partners head of asset allocation, Kate Morrisey.

“His presidency will mark a decisive shift in US policymaking, with many of his policies diametrically opposed to those of the outgoing Biden administration,” she continued.

“These, and other changes, will reverberate across the global economy, with important implications for financial markets.”

While investors were concerned just two years ago about inflation taking hold across the global economy, today’s economy “appears to have defied economists’ gloomy recession forecasts to remain robust”, Morrisey said.

With policymakers around the world easing their monetary policy, there could be an acceleration of global growth over the next 12 months.

This is supported by the “extraordinary” performance of the US stock market, which Morrisey said was likely to continue under the Trump administration.

“With global growth set to accelerate over the next 12 months, companies have an opportunity to deliver strong earnings,” Morrisey stated.

“It is worth noting, however, that the bar for outperformance has been raised. Consensus expectations are for earnings per share for companies globally in the MSCI benchmark to grow 12 per cent in 2025, 3 percentage points higher than the expectations for 2024.

“The second half of this decade promises to keep investors on their toes. We expect 2025 to be shaped by relatively strong global growth and a broadening out in market performance, whilst remaining vulnerable to uncertainties on different fronts, Trump’s economic policy agenda and ongoing geopolitical risks in particular.

“Against this backdrop investors will need to carefully balance investment risk and opportunities.”

The continued rise of AI

Next year is forecast to continue the trend of the rise of artificial intelligence (AI) in the wealth and advice industries, as firms looks to balance the use of AI and human input.

“We expect to continue to see AI becoming increasingly integral to wealth planning next year, both in terms of improving business efficiency and offering investment opportunities,” commented Campbell.

“AI tools will continue to enhance processes, improve reporting, and support better client outcomes.”

Campbell expected the growth of AI to continue to present significant long-term investment opportunities, and argued that the potential for growth in tech-related investments was clear.

“For wealth managers, focusing on technology-driven solutions and integrating them into client portfolios can offer the opportunity to capture growth in an evolving market,” he stated.

“While markets may not repeat themselves, they do rhyme – staying calm, sticking to the fundamentals, and maintaining a long-term view will be key to navigating 2025 successfully for the sector.”

Wealthblock CEO, Trilliam Jeong, agreed that 2025 would likely see a deeper integration of AI in wealth management, providing real-time portfolio insights and automating client communications.

“Firms will increasingly rely on AI to enhance efficiency and reduce operational costs,” Jeong said.

“The move toward hyper-personalisation will intensify, with AI tailoring client interactions to individual preferences - crucial for retaining clients in a competitive market.”

Economic momentum

Moving into 2025, HSBC Global Private Banking said it was advising its clients to keep cash at a minimum to “seize opportunities” in public and private markets amid resilient global economic and earnings momentum.

It concluded that it had become clear the US was not on course for a recession, and that this positive outlook should trigger a rise in private sector investment.

Furthermore, industrial policies, AI applications, M&A deals, and fiscal and monetary stimulus in China should “add to the positive momentum globally”.

HSBC Global Private Banking said it continued to see better opportunities in the US stock market than in Europe, due to relative levels of current growth, innovation and policy support, and expected Asian growth to stay resilient in 2025.

“The US’s steady GDP is like a super tanker that will be difficult to blow off course, said HSBC Global Private Banking and Wealth global chief investment officer, Willem Sels.

“We’re at a favourable point in the global economic cycle and are telling our clients that sitting on excess cash is likely to be a drag on performance.”

Meanwhile, Jeong stated that the market for private stakes was anticipated to expand, offering clients liquidity options beyond traditional exits like IPOs.

"Investors may look to secondary markets for more flexible and immediate exposure to private equity investments," Jeong concluded.

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