Wealth Management
Financial advisors are rapidly integrating generative AI into their workflows, with 76% reporting immediate benefits, particularly in efficiency and client engagement. Concerns about AI replacing human advisors have diminished, with only 8% viewing it as a threat, down from 21% a year ago.
While firms are increasingly formalizing AI policies—jumping to 82% from 47% in 2024—advisors remain selective in their use, favoring AI for analytics and marketing rather than personalized financial planning.
Many see technology as a competitive advantage, with 57% acquiring clients from competitors with outdated systems. However, despite AI’s rapid adoption, 65% of advisors believe their tech stacks still need improvement.
Finsum: As AI-driven tools continue to reshape wealth management, firms that strategically implement these advancements stand to gain the most.
RIA custodians play a crucial role in safeguarding the assets of registered investment advisors while maintaining independence to ensure client funds are handled properly. These custodians can be banks, trust companies, or broker-dealers, but all must adhere to regulatory standards that prevent misuse of assets.
Selecting the right custodian is one of the most significant decisions for an RIA, as it impacts everything from operational efficiency to client trust.
Key factors to consider include the custodian’s reputation, experience working with firms of similar size and focus, and fee transparency. Additionally, some custodians have minimum asset requirements, which can be a hurdle for smaller firms looking to establish a partnership.
Finsum: Beyond asset management, a strong custodian should also offer reliable service and support to help RIAs grow and navigate industry challenges.
The defined contribution investment-only (DCIO) industry continues to grow, reaching record asset levels despite increasing pressure on fees and revenue models. Target-date funds (TDFs) remain a dominant force, with more plan sponsors considering active management strategies to enhance participant outcomes.
At the same time, large passive fund managers are introducing competitively priced active funds, creating new market dynamics. A key decision for advisors is knowing when to pull the trigger on a switch to active plans, and a riskier economic environment can be the right opportunity.
Meanwhile, personalization is becoming a key focus, though legal challenges surrounding managed accounts may slow adoption. Lastly, collective investment trusts (CITs) are gaining ground on mutual funds, with potential legislation poised to expand their availability in 403(b) plans.
Finsum: DCIO is an ongoing process and shouldn’t be treated like a static one-time decision, consider traditional portfolio strategy and customization as opportunities to shift DC investments.
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American consumers are increasingly uneasy about the economy, as reflected in multiple sentiment surveys. The Conference Board’s Consumer Confidence Index fell sharply in February, marking its third consecutive decline amid rising inflation expectations.
Small businesses and homebuilders are also voicing concerns, with uncertainty reaching record levels among independent business owners. The Federal Reserve is closely monitoring inflation expectations, as shifts in consumer sentiment could influence spending behavior and long-term price stability.
While consumer confidence doesn’t always predict spending, a new Wells Fargo survey suggests many Americans, particularly younger generations, plan to cut back due to economic uncertainty.
Finsum: Rising costs for essentials like dining out, fuel, and entertainment are prompting noticeable changes in financial habits and part of weakening sentiment.
After leading the stock market in 2024, the communications sector is once again the top performer in 2025. Despite the dominance of tech giants like Nvidia and Palantir, communications continues to excel, largely driven by Meta Platforms and Alphabet, which make up nearly half of the sector.
The Vanguard Communication Services ETF offers investors an affordable way to gain exposure to these companies, though its holdings are heavily concentrated.
Alphabet and Meta thrive on high-margin advertising models, unlike media and telecom firms that require heavy capital investments. Both companies are aggressively investing in AI and cloud infrastructure, yet their valuations remain attractive compared to other mega-cap tech stocks.
Finsum: As long as these two firms continue their strong performance, the communications sector—and funds tracking it—could potentially keep outpacing the broader market.
Cryptocurrency is making its way into retirement accounts, but it's not the right fit for every investor. Crypto IRAs, also known as bitcoin IRAs, allow individuals to hold digital assets like bitcoin and ether within tax-advantaged accounts.
While these accounts offer potential tax benefits—especially within a Roth IRA—they come with high fees, regulatory uncertainty, and extreme price volatility. Unlike traditional brokerage firms, crypto IRA providers operate under different standards, adding another layer of risk.
Some investors may find bitcoin ETFs a lower-cost alternative to direct crypto ownership within an IRA. Regardless of your approach, diversification remains crucial to balancing the risks and rewards of crypto in a retirement portfolio.
Finsum: Crypto is a very good alternative to integrate into the portfolio, but most investors either over or under index so be careful when integrating into your portfolio.