Staying ahead by embracing AI, transparency, and Gen Z’s expectations
As we sprint—or stumble, as the case may be—into 2025, the wealth and investment management landscape is evolving at an unprecedented pace. From geopolitical shifts to the rise of AI, transparency demands, and a new generation of investors reshaping the market, firms must stay agile to thrive in this changing environment. In this blog, based on our latest podcast discussion, we explore four key trends that will define the industry in the coming year:
- The 2025 overall trends and shifts – examining geopolitical uncertainties and demographic changes impacting investment strategies.
- AI’s role in wealth management – how artificial intelligence is transforming advisory services, personalisation, and risk assessment.
- Transparency – why investors, regulators, and clients are demanding greater clarity in financial products and services.
- Engaging younger investors – the rising influence of Gen Z and Millennials on wealth management strategies.
The 2025 overall trends and shifts
The global economic and political landscape is entering a period of transformation, with the outcome of the U.S. elections playing a pivotal role in shaping the direction of international markets. A potential return of Donald Trump to the White House could lead to increased protectionist policies, tariff wars, and a recalibration of global trade partnerships. With U.S.-China tensions escalating, Chinese firms may seek to expand their footprint abroad, particularly in emerging markets across the Global South, to counteract trade barriers and access new opportunities.
Beyond geopolitics, demographics are shifting investment patterns. The West’s ageing population continues to wield significant influence in policy-making, electing older leaders and reinforcing economic conservatism. In contrast, the Middle East and parts of Asia are experiencing a youth boom, yet many of these young people face high unemployment rates and economic instability, which could lead to further market volatility.
For wealth managers, these shifts highlight the urgency of adapting investment strategies to both short-term geopolitical risks and long-term demographic changes. With trillions in wealth set to transfer from Baby Boomers to Millennials and Gen Z, understanding these macro trends will be crucial for firms looking to engage the next generation of investors effectively.
The role of AI in financial planning and its impact on wealth management, insurance, and retirement planning
It is plain to see that artificial intelligence is revolutionising the financial sector, driving personalisation, efficiency, and innovation in wealth management. Large language models (LLMs) and generative AI are at the forefront, transforming client interactions by offering chat-based advisory services with rapid, tailored responses. The integration of AI in financial planning is reshaping customer experiences, allowing firms to streamline operations, enhance engagement, and improve decision-making.
A prime example is Morgan Stanley’s GenAI-powered knowledge management system, which helps financial advisors access insights quickly and improve the accuracy of their recommendations. Similarly, Kidbrooke’s “Kate” platform integrates structured financial models with LLMs, minimising AI hallucinations and enhancing reliability. Unlike conventional AI models, Kate retains structured memory, ensuring that financial advice aligns with a client’s goals, risk tolerance, and previous interactions. This approach mitigates context drift, a common issue with LLMs, by continuously verifying outputs against known financial data
However, AI adoption in financial services remains limited. Goldman Sachs estimates that only 5% of U.S. firms currently use AI, though adoption is expected to double by 2025. Despite its potential, AI faces challenges such as high energy costs—training ChatGPT-4 consumes as much power as 5,000 households—and concerns around data privacy and bias. Emerging innovations, such as DeepSeek AI from China, offer energy-efficient alternatives, proving that AI’s challenges are solvable in a competitive landscape
AI’s impact extends beyond wealth management into insurance, retirement planning, and broader financial services. It automates administrative processes, reduces costs, and enhances risk assessment models. Platforms like Kate leverage deterministic financial models, requiring user confirmation when inputs are uncertain and ensuring that assumptions and calculations remain transparent
Yet, while AI improves efficiency, the financial industry remains cautious but open-minded. Regulatory scrutiny is growing, with 2025 set to be a pivotal year for AI governance, focusing on AI safety, privacy, and misinformation
The consensus is clear: AI will not replace human advisors but will augment their expertise, ensuring clients receive trustworthy, data-backed financial guidance.
The next generation of investors: digital-native and purpose-driven
Gen Z is redefining the investment landscape, bringing unprecedented influence and digital-first expectations. Representing 32% of the global population and 40% of consumers, they hold a direct spending power of US$200 billion annually and an indirect influence of up to US$3 trillion. Unlike previous generations, they have grown up in a hyper-connected, digital world, shaping their approach to financial decision-making.
This generation prioritises sustainability, ESG investing, and authentic digital experiences. However, they are also highly skeptical of inauthentic marketing and can easily identify insincere attempts to capitalise on these values. Wealth management firms must adapt, ensuring transparent, values-aligned engagement strategies that resonate with Gen Z’s tech-savvy and socially conscious mindset.
Despite enjoying low unemployment and strong wage growth, their spending habits lean toward lifestyle experiences rather than long-term wealth accumulation. However, with rising living costs and potential economic downturns, they may soon face financial challenges. This makes financial education critical, yet much of their guidance comes from social media “finfluencers”, who may lack proper qualifications. Financial institutions should meet them where they are—leveraging TikTok, Instagram, and gamified financial tools—to provide credible, engaging financial advice that encourages early and informed investment decisions.
Transparency: the cornerstone of trust in financial services
As Gen Z reshapes investing with their demand for authenticity, transparency has become a non-negotiable expectation in financial services. Investors rightfully expect clear, accessible, and honest information about how their money is managed. However, the evolving landscape of ESG investing and regulatory changes presents both opportunities and challenges for asset managers navigating these expectations.
The debate around ESG investing has intensified, particularly in the US and Europe. While some investors remain committed to sustainable investment principles, anti-ESG funds have emerged, often underperforming. A 2024 EY survey revealed that 85% of investors consider greenwashing a more significant concern today than five years ago. This reflects growing scrutiny over how ESG metrics are reported and used, with regulators increasing oversight to ensure transparency and accountability.
The Swedish Fund Information Review (FIR) 2024 highlighted significant gaps in fund information accessibility. The study’s reception underscored the growing industry momentum toward making investment products more transparent, aligning with Sweden’s progressive financial market standards. With asset managers expected to further enhance communication and compliance in 2025, transparency is evolving from a regulatory requirement into a competitive advantage.
At Kidbrooke, we believe transparency is more than just compliance—it’s about creating a financial ecosystem where investors feel empowered. By combining advanced analytics, personalisation, and proactive communication, firms can build trust, mitigate risks, and foster long-term investor confidence. In an era where trust is the new currency, those who champion transparency will lead the future of wealth management.
Conclusion
As we progress through 2025, the wealth and investment management landscape continue to evolve, shaped by geopolitical shifts, AI advancements, investor expectations, and the influence of younger generations. The rise of protectionist policies and demographic changes demand strategic agility from wealth managers. Meanwhile, AI is revolutionising financial planning, enhancing efficiency and personalisation, though its adoption remains cautious. The growing presence of Gen Z in financial markets underscores the need for authentic engagement and digital-first strategies. At the core of these transformations is transparency, the foundation of trust in financial services. Firms that embrace these trends with adaptability and integrity will be best positioned for success in the year ahead.
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