Wealth Management Trends 2023

The wealth management trends for 2023 show new approaches will be needed to thrive in the current climate.

Just as the world is moving past the worst of the COVID-19 pandemic, inflation and headwinds dominate the headlines.

These developments will affect the way wealth managers think, invest, and operate, in addition to other factors. While there will be difficulties, there are opportunities for those who adjust and adapt.

12 Wealth Management Trends for 2023

1. High Inflation Threatens Economic Growth Outlook

Inflation hit 40-year highs in 2022, through a perfect storm of events:

  • Disrupted supply chains from COVID-19 lockdowns and Russia’s invasion of Ukraine
  • Worker shortages
  • Printing more money at the height or the pandemic
  • Recovering demand from pandemic lows

Some inflation is good, but at persistently high levels, it threatens economic growth.

And the above events are still impacting the economy and the wallet of the average consumer.

In an attempt to tame inflation, the Federal Reserve raised the benchmark short-term borrowing rate a total of six times in 2022.

While there are early signs inflation is slowing, there’s a long way to go.

And as rates rise, so will the chances of recession increase.

2. Mixed Stock Market Projections in 2023

As inflation remains high and slowdowns in consumer spending impact corporate earnings, 2023 may very well carry over a lot of the baggage from 2022.

And as we know, 2022 was a rough year for the market, which entered bear territory.

$9 trillion of total American household wealth was wiped out, with full reverberations yet to be known or felt as 2023 arrives.

However, things could turn around under a few positive scenarios:

  • China lifting COVID lockdown and travel restrictions
  • Resolution to the Russia-Ukraine conflict
  • Sustained falling inflation
  • Federal Reserve rate hikes slow, stop, or reverse

And some are optimistic about an end of the bear market.

Mike Wilson, chief stock strategist at Morgan Stanley, thinks the bear market could be over by the first quarter of 2023.

"We think the market will hold up and that will be another positive catalyst, because if the market doesn't go down on bad news, and the market doesn't go down on bad news and fundamentals, what do you have?"

3. Hedge Against Inflation - Investment Strategies

Finding safe and reliable investments has been a challenge in the current environment, as inflation eats into consumer spending and corporate earnings.

Once-hot performers like real estate have shown signs of cooling amidst rising interest rates. Even gold is predicted to fall further, according to the World Bank.

And while investors run to the US dollar for stability, the increased and “extreme" strength of the dollar creates additional investing risks.

There’s no quick and easy win, but there are opportunities out there who do their research.


As energy prices have risen amidst a recovery in demand post-pandemic, the Vladimir Putin-led Russian invasion of Ukraine sent oil and gas prices soaring even higher, as supply chains have been disrupted.

As Western markets phase out Russian energy, and alternate sources yet to fill in the void, energy prices will remain at high levels.

Consumers lose, but oil and gas producers win, as they enjoy record profits.

Energy stocks were up 39% in 2022, and with high oil and gas prices, they will continue to perform well. That said, energy is prone to boom-and-bust cycles. As we’re in an inflationary period, this is when the sector typically shines. But when it crashes, it crashes hard.

At the same time, US and other Western legislators are scrambling for new suppliers and developing additional energy sources.

And with passing of the Inflation Reduction Act of 2022, the US government is prioritizing investments in domestic energy production while promoting clean energy.

With so much activity in the energy sector, there will be investing opportunities.


Tom Lauricella, the chief markets editor, at Morningstar, described 2022 as "the worst in modern history for bond investors.”

According to the Bloomberg Global Aggregate Index of government and corporate bonds, they are down more than 20% since the beginning of the year.

But it’s not all bad news; falling prices means rising bond yields.

"For the first time in a long time, there is actually income in fixed income.”

- Kathy Jones, chief fixed income strategist at Charles Schwab.

Buy Abroad (Outside the US)

With relative strength of the US dollar, international assets look more attractive.

Non-dollar denominated equities and other assets are available at bargain prices for US-dollar holding investors.

Of course, do your own due diligence; be careful and smart where you invest.

This Seeking Alpha article provides a good analysis on foreign asset purchasing.

Select Stocks

Equities markets had a rough year in 2022, and 2023 prospects are murky.

Still, there are always a select few that buck the trend.

Check out this article that analyzed 15 stocks predicted to double in value in 2023.

4. The Crypto Crash Continues

By November 2021, bitcoin hit its peak, then it showed signs of cracking.

By 2022, the crash was in full swing. Bitcoin has lost 70% of its value from its all high.

And cryptocurrency market capitalization fell from $3 trillion to $900 billion, making it the 5th-worst collapse of an asset in financial history.

One may look at this and think the bottom must be near, but for the time being, it’s more like a bottomless pit. As independent financial and economic commentator Frances Coppola pointed out:

“We’ll have to wait and see what the fallout is, but I think we are going to see more dominoes falling and an awful lot of people stand to lose their money and their savings, and that is just tragic, really.”

More Regulation Wanted for Crypto

In early 2022, the cryptocurrency industry got a boost of support from the White House.

US President Joe Biden signed an executive order, calling for the Department of Treasury and other federal agencies to study the impact of cryptocurrency on financial stability and security.

This executive order was widely interpreted as paving the way for the expanded use and legitimacy of cryptocurrency.

While a positive sign, the American public feels more needs to be done.

According to a national poll conducted by the Crypto Council for Innovation, a majority (58%) of 1,200 US voters surveyed want more cryptocurrency regulations. Survey respondents want lawmakers to prioritize market stability and fraud detection.

Perhaps a more regulated industry will pave the way for a crypto market rebound and more stability.

5. Wealth Managers Invest in Private Equity, and Private Equity Firms Invest in Wealth Managers

It’s a two-way street, almost like a symbiotic relationship. Both sides have opportunities to invest in the other.

For starters, private equity investing is no longer just for large institutional investors.

Private equity firms recognize there’s so much capital out there (trillions) left on the table, and more and more PE firms are marketing themselves to attract that capital.

Smaller- and medium-sized wealth managers will have more opportunity to invest in PE, as private investments have outperformed their public counterparts.

Check out one of our posts on the rise in private equity investing for wealth managers.

At the same time, PE firms return the favor and invest in them.

Private equity investing has driven record levels of consolidation in the wealth management industry.

And for wealth managers, private equity ownership means an injection of resources and expertise, which allows them to deliver new products and services to their customers.

Michael Wunderli, managing director for Echelon Partners, shared his take:

"The acquiring [private equity] firms are run by sophisticated management teams that have been designed to increase profitability and drive faster growth for acquisitions."

6. Advisories Fight Back Against Fee Compression

In recent years, there has been a lot of talk about fee compression.

While it is true that large competitors like BlackRock and Vanguard have cut their fees, and downward pressure on fees had hit record lows, some firms have seen their fees go up.

According to data from consulting firm Cerulli Associates, advisory fees rose on average 2.8 basis points from 2020 to 2021 for all investors. The average account fee in 2021 was 0.69%, up from 0.60% in 2020.

What’s driving the uptick? Simply put, clients are willing to pay for value in wealth planning and expertise. Scott Smith, director of advice at Cerulli Associates, stated:

"We have seen firms offering more and more services to their clients so paying a little more isn’t seen as much of a problem.”

Michael Kitces, a well-known investment industry blogger and head of planning strategy at Buckingham Wealth Partners, never thought fee compression was a substantive issue:

"[I]t was about doing more to EARN the 1%.”

7. Generational Wealth Transfers Pick Up Steam

For the last few years, there has been talk about the “Great Wealth Transfer.”

Year by year, this phenomenon manifests itself more.

The Baby Boomer generation, roughly defined as those born between the mid-1940s and mid-1960s, have already begun to retire, with more on the way.

As they do so, they will pass on wealth to children and grandchildren.

By 2045, up to $84 trillion in wealth will be transferred, according to Cerulli Associates.

Wealth advisors need to think about their older clientele:

  • When are they passing wealth and assets to beneficiaries?
  • Who will the beneficiaries decide to manage their newly inherited money?

Wealth management firms should think about ways to keep the business of the older clients’ beneficiaries.

Wealth Transfer Under a Biden Administration

Nearly two years into office, the Biden administration and Democrats have sights set on some of these areas:

  • Raising taxes on the highest income brackets
  • Closing loopholes that once made estate and gift taxes possible to avoid

Depending on what legislation gets passed and when it takes effect, that may influence when and how your wealth management clients transfer assets.

8. Wealth Planning Becomes Increasingly Market Segmented

Just as wealth gets passed down, and as the millennials and Gen Z become a larger market, wealth managers will need to adapt.

They are tech-savvy, and they’ll expect you to be as well. Additionally and generally speaking, they are socially conscious and want to invest in a way that reflects their values.

To maximize revenue and quality of client service, wealth managers should carefully segment their clientele and cater to them accordingly.

This post from eMoney provides great advice on how to segment.

9. Hybrid Work a Permanent Fixture in Wealth Management Work Culture

Since March 2020, the transition from office to home has been a success, a PwC report illustrated. More than 70% of financial services employers surveyed found work-from-home to be successful or very successful.

In fact, 96% of financial services professionals would take a pay cut to permanently work from home.

Employees are less tolerant than ever of commuting to and from an office, as shown in many cases the work can be done just as well at home.

That’s not to say in-person meetings and collaboration are not important. They are very much important, but is it 5 days a week important? Probably not.

And with gas prices as high as they are, employees will be less enthused about regular commutes to the office.

If you can save your employees the time and money not having to commute to and from work, you will do them a lot of favors. Not offering a hybrid work environment will be a hindrance to attracting new talent.

The other question is, do you need all that office space? One of our earlier posts discusses the topic of office space for RIAs.

10. More Advisory Firms, Fewer Winners

There are now over 14,800 registered investment advisors in the United States, part of a continued annual increase over the last decade.

In spite of the growth in wealth management servicing and the demand for talent, there is another challenge: a disproportionate amount of assets could be concentrated in the hands of fewer advisors.

With growing competition and an increasingly digital atmosphere, wealth managers must adapt technologically to stay ahead.

Good marketing, sales, and networking are also important. Check out some of our recent content around these topics:

11. Older Advisors Planning to Retire

Though some older advisors show no signs of slowing down or retiring, others are calling it a career.

About 40% of financial advisors plan to retire within 10 years, according to CNBC. In fact, there are more certified planners over the age of 70 than there are under 30.

For business owners close to retirement, they should think about succession planning for their business, as well as attracting new talent. 

This includes outreach to college students, in particular women and minorities who are currently underrepresented in the investment industry. Expanding and cultivating the talent base is a win for all wealth management firms. 

12. Personalized Wealth Management Services; Leveraging Technology

The great wealth management companies know how to tailor the client experience, making optimal use of human capital and technology.

Furthermore, the call for digital adoption among wealth managing firms is nothing new. It’s a message loudly proclaimed even before the pandemic.

Candice Carlton, senior vice president of adviser education at FiComm Partners, stated it best as quoted in this InvestmentNews article

“To stay relevant, it is critical that the adviser of today stay connected in a high-touch, digitally enhanced way to drive loyalty, trust and wallet share. Clients now expect their advisers to add value beyond the traditional financial plan and twice a year in-person meeting…  advisers need help in learning how to adopt and use modern communication mediums to supercharge their prospect and client experience.”

AI & Robotic Process Automation

As wealth management competition intensifies, moving fast in an efficient manner is more than ever.

Download Our Automation Guide

New technology is making it possible to do more in less time and with fewer resources.

Artificial intelligence (AI) is one of the tools to help. Machine learning can help wealth managers recognize patterns, anticipate future events, create rules, make good decisions, and communicate with others.

AI is big business. The global AI software market is projected to grow rapidly in the coming years, reaching USD $126 billion by 2025.

And by 2024, 75% of organizations will shift from piloting to operationalizing artificial intelligence, according to Gartner.

Wealth managers have indeed begun to embrace AI, as 68% of wealth management organizations are using AI tools to support decision-making processes.

According to a report from Arizent, parent company of the publication Financial Planning, the report stated:

"Wealth management's ardent approach to the technology is notable given the wide variety of firms small and large reporting for this survey. Participants come from seven types of wealth management firms and hail from companies with assets under management as little as under $100 million to $2 billion or greater."

To learn more about AI use cases and benefits for investment managers, check out this Deloitte report.

While AI focuses on the independent learning of machines, Robotic Process Automation (RPA) focuses on performing routine and predictable tasks.

Repeatable steps like downloading statements, storing files, and emailing reports can be done through RPA. In fact, has Empaxis has developed tools to help in these areas, helping investment firms of all kinds.

Broadridge survey revealed that 57% of financial firms have long-term plans to increase automation through RPA and AI.

Data & Analytics

We live in a data-driven world.

In an increasingly competitive space, wealth managers need accurate, up-to-date information to allow for faster decision-making.

Having the means to aggregate data and see it in a nice, clean and customizable format is indeed helpful.

And it’s not just for the wealth managers; it’s for their clients, too. Clients across all age ranges are coming to expect modern fintech from their advisors.

Even older clients that generally shunned new technology are now opening to it, given the importance of protecting their health during the pandemic.

Clients should have easy and instant access to their portfolio details, via cloud-based technology.

It’s to a point where these features are no longer just nice additions; they are necessities.

Good data is a significant part of a firm’s credibility. Having the right data management and portfolio management platforms like TAMP1 can help.


Being an expert at everything is not easy, nor is it necessary. Wealth management executives and their staff should focus on what they do best: investing and client servicing.

Admin and operational work are important, but they’re not the main reasons for going into business. For anything that is non-core and a cost of doing business, it can be outsourced.

Fidelity survey on outsourcing for wealth managers shows just the value that can be had from leveraging third parties. In short, those who outsourced were more likely to report a growth in clients and larger AUM.

Download our white paper: Making Outsourcing Work

The Next Step for Wealth Managers

The recent wealth management trends show opportunities and challenges facing the industry, and firms should look at the trends to develop a strategy around an investing, operations, technology, client servicing, etc.

The fight against inflation and a market uncertainty will continue having a significant impact on the way the wealth managers run their businesses, and their strategies should take into account the memories and lessons learned from the past, wherever and whenever appropriate.

Despite the challenges, there is opportunity out there for wealth managers; they just have to prepare and position themselves accordingly.

Empaxis is a leading provider of operational and technology solutions for wealth managers, helping them increase efficiency and scale while cutting costs. Looking to improve your organization? We can help.

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