Bridging the generation gap and leveraging technology will be two overarching trends shaping wealth management in 2025.
With an unprecedented transfer of wealth between generations on the horizon, major players must adapt to the evolving expectations of younger investors. According to Capgemini’s global banking industry leader, Gareth Wilson, the industry must embrace technology, personalisation and innovative investment strategies like asset tokenisation to remain relevant.
“The expectations of the receiving generation are significantly different from those of the generation donating the wealth,” he says. Younger investors are not only looking for growth but also prioritising sustainability, impact investing and digital engagement.
“Future generations are much more aware of the impact on the planet and the whole sustainability element of investing. ESG scores and portfolio sustainability are key considerations for future generations,” adds Mr Wilson.
This shift is echoed by experts in the family office space, who highlight changing demands of young wealth holders. The so-called ‘NextGens’ — who will be the key receivers of inherited wealth — also have much in common with self-made young entrepreneurs, according to practitioners.
Both cohorts are looking for transparency on fees, a greater variety of active investments, including venture capital, and above all, “a relationship based on trust and being understood as a young, modern person”, says Tobias Prestel, founder of family office specialists Prestel and Partner.
Intensive tailoring of wealth services to clients is also in sharp focus, says Joseph Wickremasinghe, executive director at MSCI Research, citing research showing 60 per cent of wealth managers anticipate growing client demand for personalisation. Beyond ESG preferences and investment strategies, tax efficiency remains a crucial yet often overlooked aspect of tailored wealth management, he adds.
Defending tax attacks
“Even clients who do not specify any investment preference will still have a level of personalisation driven by their cost basis and tax bracket. If managers are not incorporating tax efficiency, they are missing an opportunity to provide value-add through improving after-tax returns," explains Mr Wickremasinghe.
Wealth management firms that want to remain competitive must rethink traditional client relationships, adopting a more dynamic, value-driven approach. “A seasoned banker with amazing experience, who doesn’t know how young people talk and act, is counterproductive,” says Mr Prestel.
Data now not later
As wealth management adapts to shifting client demands, technology — particularly generative AI — is playing an increasingly pivotal role. GenAI, according to Capgemini’s Mr Wilson, “can enhance portfolio management by expanding investment options, delivering tailored advice and extracting greater value from data”.
From automating client onboarding processes to enhancing portfolio recommendations, GenAI is enabling firms to offer more customised services, he says. With younger investors expecting real-time insights and hyper-personalised financial advice, leveraging AI-driven solutions will be crucial for firms aiming to stay competitive.
Building young and diverse advisory teams is also a key strategy to engage millennial and Gen Z clients effectively. “Joined forces are best: combined young and old, modern and seasoned, especially as UHNWI portfolios should be diverse, and not either ‘old school’ or ‘all in digital’ only,” notes Mr Prestel. By fostering teams that blend experience with modern perspectives, firms can establish themselves as long-term advisors to the next generation of high-value clients.
Wealth managers are also adapting by leveraging model portfolios to provide tailored investment strategies at scale. "As the demand for personalisation increases, the number of model portfolios is increasing, and wealth managers are adopting rules-based frameworks to keep their portfolios aligned with firm-wide asset allocation while still reflecting customisation,” explains Mr Wickremasinghe.
Asset tokenisation is emerging as a transformative force in wealth management, broadening access to previously illiquid investments. “Tokenisation enables mutualisation of assets, making investments such as art and other passion assets more accessible,” says Capgemini’s Mr Wilson.
Tokenisation is transforming real-world assets – including real estate, fine art and wine – into digital tokens that can be traded or held fractionally, reducing barriers to entry. This innovation is particularly attractive to younger investors looking to diversify portfolios but lacking access to traditional high-value assets.
For many organisations, tokenisation is a means of enhancing liquidity and investment accessibility,” he explains. By broadening ownership, it provides a more inclusive approach to wealth management, enabling investors to access markets that were once beyond reach.
Fragmented platforms
Despite rapid advancements, many wealth managers feel their technology solutions are insufficient, which presents a major industry challenge. Dhruv Sharma, an executive director at MSCI Research, identifies platform fragmentation as a key issue.
“The biggest technology gaps in the wealth management industry today stem from the difficulty of integrating a broad range of tools into a seamless, cohesive platform. This fragmentation often leads to inefficiencies, with multiple touchpoints requiring manual monitoring, which becomes a significant barrier to scaling operations effectively,” he explains.
To address this, he suggests wealth firms must develop holistic, intuitive platforms that consolidate insights across asset classes, reduce manual interventions and enhance client experience.
The ‘great wealth transfer’ will continue to drive demand for increased transparency, with younger investors wanting real-time insights into how portfolios align with their values.
“Younger clients benefiting from this transfer are going to want to verify that their investment preferences have been reflected in their portfolio, whether that relates to environmental impact, board diversity, or executive compensation,” explains Mr Wickremasinghe. “Managers must be able to answer these types of questions that they may not have heard previously.”
