Wealth Management
The rise of private credit has reshaped the landscape of speculative-grade debt, absorbing many of the riskiest borrowers that once relied on public high-yield bonds. With banks retreating from direct lending due to regulatory constraints, private credit firms have stepped in, fueling a market now worth $2.5 trillion globally.
This shift has left the high-yield bond market with a stronger credit profile, narrowing yield spreads and reducing volatility. However, private credit’s lack of transparency means that credit risk hasn’t disappeared—it has simply moved to a space where prices and risks are less visible.
While public high-yield bonds have become scarcer and more expensive, some riskier borrowers are returning to public markets through structured investment vehicles. Ultimately, as economic conditions shift, both public and private debt markets may face renewed pressures, exposing hidden risks within private credit’s rapid expansion.
FINSUM: Though private credit obscures some risks, economic stress could still expose vulnerabilities across both public and private debt markets.
Estate planning is becoming a key differentiator for financial advisors, with 80% of clients expecting support in this area, yet many advisors still overlook it. A significant gap exists in tax planning, as nearly 90% of clients worry about tax impacts, but less than half have taken proactive steps.
Beyond taxes, estate planning ensures smoother asset transfers, addresses state-level taxes, and clarifies how heirs receive funds. Many clients also lack knowledge about trusts, particularly the benefits of revocable versus irrevocable structures.
Advisors who integrate estate planning into their services are growing their books faster by attracting new clients and strengthening relationships.
Finsum: Advisors who ignore it risk losing assets to competitors who offer these essential services.
Defined contribution plans in 2025 will increasingly focus on generating sustainable retirement income as Social Security’s future remains uncertain and traditional pensions decline.
In-plan retirement income products, such as annuities, hybrid target-date funds, and systematic withdrawal strategies, will see greater adoption, driven by regulatory clarity from the SECURE Act and SECURE 2.0. AI-powered digital tools will enhance retirement planning by offering personalized projections, dynamic withdrawal strategies, and automated guidance on Social Security and tax-efficient drawdowns.
Employers will expand financial wellness initiatives, providing targeted pre-retirement education on income strategies, healthcare costs, and managing distributions. Recordkeepers and investment firms will integrate advanced retirement income solutions, making it easier for participants to transition from saving to spending.
Finsum: Regulatory support is expected to continue, reinforcing the shift toward holistic, income-focused retirement planning.
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Many advisors are questioning whether now is the right time to switch firms, especially amid market volatility. While uncertainty can make timing feel risky, waiting for the "perfect" moment is often a losing strategy.
Market turbulence can actually create opportunities, as clients seek reassurance and may be more open to discussions about better solutions. The key factor in a move isn't timing but whether a new firm offers better resources, technology, and support for clients.
Working with a transition consultant can ease the process by handling logistics and securing offers discreetly.
Finsum: Ultimately, the decision to move should be driven by the right opportunity, not market conditions.
The advisor landscape is shifting, with over 9,000 advisors changing firms in 2023, particularly within the RIA sector. Many advisors employed by RIAs—often non-owners earning a percentage of revenue or salary—are seeking greater autonomy, ownership opportunities, and better compensation.
The rise of large RIA aggregators and increasing M&A activity have contributed to advisor dissatisfaction, as firms focus on efficiency and growth at the expense of individual autonomy.
Advisors looking to transition have several paths, including joining another RIA, moving to a wirehouse or bank, launching their own firm, or affiliating with an independent broker-dealer. Each option balances control, compensation, and operational complexity, making careful planning essential for a successful transition.
Finsum: As the RIA industry consolidates, firms must innovate their advisor value propositions to retain talent and remain competitive.
Switching broker-dealers is a complex process, but with the right approach, it can be a transformative step for an advisor’s business.
- Legal considerations should be the first priority, as non-compete clauses and client ownership agreements can create hurdles if not addressed properly.
- Developing a detailed transition plan at least 90 days in advance is essential, ensuring advisors understand which accounts can move, which will remain, and how client data can be organized legally.
- Engaging staff early in the process prevents last-minute chaos and helps distribute responsibilities effectively.
- Advisors should also consider client communication strategies, ensuring a seamless transition that reassures clients and maintains trust.
Finsum: Ultimately, a well-executed move can enhance an advisor’s ability to serve clients while positioning their practice for long-term growth.