Three key trends that will drive advisors' planning in 2025

The great wealth transfer. It’s all too often talked about but not enough is being done to plan for it.

As the wealth management industry is on the cusp of a seismic shift, with around $83 trillion set to change hands over the next decade, advisors are vastly underprepared.

Additionally, recent research has found that human capital will need to be addressed over the coming years if the RIA space is to continue thriving. 

AssetMark’s Group CEO Lou Maiuri believes the wealth transfer, along with succession planning and personalization, will be key aspects for advisors to pay attention to and start planning for in 2025.

“They’re all in play. These are happening as we speak,” he said.

That’s why Maiuri, who made the baby boomer cutoff in its final year and represents the younger end of the generation, emphasized the urgency for advisors to get ahead of these trends.

Great wealth transfer – more than just a trend

"This whole transfer of wealth is underway, but it's coming in different forms," he said. "You've got to engage the younger parts of the family, you have to engage women more often because of death and divorce.”

“Introduce yourself to the client’s children," Maiuri added, citing his own experience. “My advisors engage my children, now in their 30s, but they started when they were in their 20s. That relationship has to span generations,” he said.

He also asserted that advisors need to work with the entire family, not just the next gen.

The key, however, before any conversations even take place is building comprehensive financial plans that address clients' full life journeys, not just their investment portfolios, said Maiuri.

“You have to have a really good understanding of what the life plan is for the clients for the next 15 or 20 years, whatever the horizon is,” he said.

When it comes to the life plan, Maiuri advises that advisors should be asking clients how much they want to give away to charitable contributions and how clients want to transfer wealth to who and how, pointing to estate planning being a key offering.

AssetMark believes that the wealth transfer taking place is not just a trend, it's the most impactful shift in the financial industry today. With the right blend of cutting-edge technology, strategic guidance, and comprehensive solutions, it represents an unprecedented wealth-building opportunity for advisors and their clients.

Succession planning – more critical now than ever

With an estimated 100,000 advisors set to retire in the next decade, it’s no surprise the industry also faces a looming talent crisis.

"Many of them don't have a plan," said Maiuri. "You may have a great young successor, but can they afford to buy your practice?”

AssetMark developed its Ascent program to help address the issue, which aims to help advisors at every stage of their lifecycle, from starting out to transitioning a practice. This includes sourcing and training interns and working with universities, as well as providing financing solutions to facilitate smooth successions.

“We're going to make sure we can help you get through whatever you need. Whether it's sustain, maintain, or transition,” he said.

“The earlier that we can engage advisors, the better probability we have to help them through this and help them think through what the different models are. Some fit perfectly given an advisor’s game plan, and some don't,” said Maiuri.

“It's a real challenge, and I don't think the industry is ready for it,” he added.

Consequently, one such challenge Maiuri believes is the new generation of clients and even advisors will have very different priorities than their predecessors.

"The experience my customers want is more technical, more digital," he said. "Their values are different."

There’s also a shift around an increase of outsourcing, as Maiuri believes more of the next gen advisors will look to outsource more.

“They may insource some parts, but they will look to outsource more so they can focus more on their clients’ life plan.”

The personalization era

As for personalization, it’s now a client expectation. Advisors must adapt as advances in technology have made it feasible to create highly customized financial plans and portfolios, especially as younger clients expect the same level of customization they get in other areas of their lives.

“Fifteen or 20 years ago, the capabilities to personalize portfolios were hard to produce because the technology scale wasn't there, and the capabilities weren't readily done in an efficient way. But today it's all there,” he said, pointing to tools like separate accounts and unified managed accounts.

“If you want to obtain alpha for your clients, you have to start to play in the private markets," said Maiuri, noting that private equity, private credit, and other alternative assets will be crucial.

But he cautioned that this added complexity requires a new level of tax optimization and liquidity management.

“We rolled out our Tax Managed Services product, allowing for optimization of taxes around customized portfolios to retain as much wealth as possible,” he said.

While technology is central to these shifts, Maiuri cautioned advisors against trying to manage it themselves.

“Your job is to work with your clients, not to install and manage technology,” he said, pointing to AssetMark’s offering of “renting” technology, including AI-driven tools that optimize operations and enhance client service.

"Find a great partner like ourselves at AssetMark, and you can have access to all of that and power up your business."