Wealth firms eye tech, AI to drive growth in 2025

Wealth management firms are expecting steady expansion in 2025, with most executives projecting revenue growth of at least 5 percent. However, firms are also facing challenges related to technology adoption, regulatory compliance, and talent acquisition, according to Wipfli’s latest report on the state of the industry.

The survey, which gathered insights from 109 executives across portfolio management, advisory, and leadership roles, found that 91 percent of respondents anticipate growth of at least 5 percent in the next 12 months. More than one-third expect an increase of between 8 percent and 10 percent, while 8 percent predict growth exceeding 10 percent.

To help meet their expansion goals, firms are focusing on technology-driven strategies. Improving data analytics and enhancing digital customer engagement ranked as the top two priorities for growth, each cited by 61 percent of respondents. Talent management was also a key focus, with 59 percent of executives identifying it as a high priority.

"Respondents' answers reflect an understanding that technology is essential to success in high-performing companies," Wipfli partner Ronald Niemaszyk said in a statement. "They've seen automation, AI and digital apps enhance the efficiency and effectiveness of their work, and they want to ensure that they're taking full advantage of these tools."

AI adoption in the early innings

Wealth firms are investing heavily in digital tools to streamline operations and improve client services. More than half of the executives surveyed – 58 percent – said automation is having a significant impact on portfolio management and rebalancing. Additionally, 55 percent reported AI-driven marketing tools were driving growth by helping them attract new clients, and 54 percent said digital platforms were making account management more efficient.

Despite these investments, many firms are still in the early stages of AI adoption. When asked about their approach to AI, only 13 percent said they were conducting pilot projects, while 27 percent were consulting with AI experts and 25 percent were analyzing cost-benefit ratios.

“This makes sense for the current state of AI technology,” Anna Kooi, CPA, partner and leader of Wipfli’s financial services practice, wrote in the report. “Most
wealth management firms are still in the early stages – exploration rather than transformation.

Costs, integration, and privacy challenges

While firms are increasingly reliant on data and digital tools, putting together these systems into a cohesive stack has posed challenges. More than half of respondents (53 percent) cited high costs as a barrier to implementing data architecture, while 51 percent pointed to difficulties in integrating new systems with existing platforms. Data privacy and security were also concerns, with 50 percent listing them as significant obstacles.

Firms are also grappling with a competitive hiring landscape, as nearly 60 percent identified talent management as a key growth focus. The need for professionals with expertise in data analytics, AI, and digital client engagement is particularly pressing.

When asked about their organic growth tactics, roughly three-fifths of respondents said they plan to lean into social media (64 percent), client referrals (62 percent), and website or search engine optimization (56 percent). Just over half also pointed to event marketing (52 percent) and direct marketing (52 percent).

“Respondents are using all the right strategies to drive growth,” Kooi said. “To make those approaches successful, they also need to focus on improving customer engagement and strengthening their own data analytics capabilities."