The number of high-net worth individuals, who have over $1 million in investible assets, has steadily increased in recent years. While the wealth management industry is booming as a result, the sector is also in a state of flux due to emerging technologies and the unique preferences of young investors.
In 2025 Wealth Management Trends, a report from Greg O’Gara, Lead Wealth Management Analyst, and Disha Bheda, Wealth Management Analyst, at Javelin Strategy & Research, delved into the trends that have brought the wealth management industry to a crossroads—and the paths it can take to move forward.
The AI Transformation
The implementation of artificial intelligence has been on the agendas of businesses across all sectors, and the wealth management industry is no exception. Many of the world’s largest financial firms have deployed sophisticated AI systems that are revolutionizing everything from client communication to investment analysis and back-office operations.
The Morgan Stanley Debrief platform, for example, is a significant step beyond the institution’s previous AI-powered efforts, which were mainly designed to reduce an advisors’ research lift. Instead, Debrief puts AI front and center in customer communications.
“Debrief exemplifies the AI transformation,” O’Gara said. “The program is expected to save advisors approximately 30 minutes per meeting across one million annual client calls—a significant aggregate efficiency gain that allows advisors to focus on higher-value activities.”
One of the most impactful aspects of the Debrief platform is its ability to monitor advisor-client Zoom meetings and take notes—a function previously handled by other employees or the advisors themselves. Debrief creates detailed logs of advisors’ meetings and automatically generates emails and summaries of the discussions.
Morgan Stanley rolled out its program to the firm’s roughly 15,000 advisors last summer, in one of the most significant implementations of generative AI at a major bank.
“However, this technological advancement comes with its own challenges,” O’Gara said. “As firms rush to implement AI solutions, a technological divide is emerging between industry leaders and laggards, particularly affecting smaller Registered Investment Advisors (RIAs) who may struggle to keep pace with the rapid evolution of technology.”
The Self-Directed Surge
Technology has also played a key role in the dramatic shift toward self-directed investing over the past few decades. According to Javelin, one-third of advised clients with over $100,000 in liquid assets already maintain self-directed accounts alongside their advisory relationships, and Javelin expects that number to easily exceed 50% in the coming years.
This hybrid self-directed/advisor-managed approach is forcing traditional advisory firms to rethink their value propositions. Adding to the complexity of self-directed investing is the emergence of automated advisors, or “robo-advisors” such as PortfolioPilot. The platform gained 22,000 users and $20 billion in assets under management in its automated portfolio through just the first two years of operation.
The number of hybrid, self-directed, and automated platforms that have emerged has given investors more options than ever, which also creates some challenges.
“Modern self-directed platforms are leveraging natural language processing and predictive analytics to serve as sophisticated trading companions, providing capabilities that were once exclusive to institutional investors,” O’Gara said. “This diaspora of investment tools is blurring the traditional boundaries between self-directed and advised accounts, creating new regulatory challenges and risk management concerns—and opportunities.”
A Digital-First Generation
The technological metamorphosis of the wealth management industry is being accelerated by a new generation of investors. Unlike previous generations, Gen Z investors are starting their investment journey earlier and largely have a natural affinity for AI tools and self-directed platforms.
Gen Z’s investment behaviors are heavily influenced by social media and gaming mechanics. These preferences are creating new patterns of market engagement that traditional firms must acknowledge, especially when taking a holistic approach to portfolio risk management.
Younger adults are also more focused on environmental issues, which has created unexpected synergies with their technological preferences. O’Gara noted that the “’E’ in ESG will increasingly stand for ‘Energy,'” because of Gen Z’s continued interest in the high energy demands of AI and the resulting environmental impact.
The industry is already shifting to accommodate Gen Z’s preferences. Robinhood’s recent acquisition of Trade PMR signaled a strategic push to create a bridge between self-directed trading and wealth management services, using a RIA referral approach that is similar to what exists today at Fidelity and Schwab.
“Robinhood faces unique challenges in monetizing this opportunity without the proprietary asset management solutions that its larger competitors possess,” O’Gara said. “Without asset management products in the RIA channel, it will be difficult to capitalize on assets that flow outside the firm. They’ll have to come up with a solution for that.”
A Dynamic Cycle
As these trends accelerate and converge, wealth managers will have to develop strategies that blend AI capabilities, self-directed tools, and human expertise, while keeping younger generations’ preferences in mind. A key challenge will be maintaining the human element amid these technological and cultural shifts.
Though there have been concerns that tech could eventually replace wealth managers, it’s more likely that the advisor’s role will simply evolve. Financial advisors will focus more on behavioral coaching and holistic financial wellness across multiple accounts. They will also have to help clients navigate the increasing complexity of investment options, while explaining the benefits and drawbacks that accompany each vehicle.
In addition, firms will have to navigate these changes while addressing regulation, risk management, and client expectation challenges. There are many obstacles to overcome, and these challenges are only exacerbated by the industry’s rapid shift. The transformation of wealth management is not a future event—it is happening now, at a pace that will only accelerate.
“We’re witnessing a dynamic cycle of innovation and adaptation,” O’Gara said. “AI is enabling more sophisticated self-directed trading platforms, which particularly appeal to Gen Z investors, while Gen Z’s digital-first mindset is pushing the industry to accelerate AI adoption and reimagine traditional advisory relationships.”
