Legislative changes, emerging technology like AI, market movements, and dealing with client expectations will be among the biggest challenges in 2025, according to a group of advisers.
Omura Wealth Advisers director of wealth management Terry Vogiatzis believes that managing client investment expectations will be the biggest issue in 2025.
A strong rally in domestic and global equities, cryptocurrencies and a potential recency bias may cause clients to develop a false sense of security in risk assets, along with unrealistic future performance expectations are going to hit advisers hard in 2025.
“This market euphoria will likely cause clients to chase risk for the wrong reasons,” Vogiatzis said.
“I also predict further enquiries into bitcoin and frustration with advisers’ hesitation to entertain these discussions.”
Vogiatzis said clients can sense if an adviser is abdicating responsibility or expressing negative sentiment due to biases or internal conflicts.
“These can range from an inability to charge for management, licensee or legal restrictions, or lack of understanding.”
Vogiatzis urged advisers to have frank discussions about the appropriateness of cryptocurrencies and related asset classes, and be honest about their own limitations and conflicts without being dismissive.
Dealing with pulling back expectations, likely sell-offs in markets and growing levels of uncertainty will be a challenge. “This expands into expectations, as more clients and investors are now expecting the returns of the last few years to continue in perpetuity, and we aren’t necessarily great at dampening expectations.”
Radiance Wealth principal financial adviser Ravi Moolchandani predicts business changes will be driven by the approaching January 2026 financial adviser education requirements to have an approved degree qualification, which not all existing advisers may fulfill, although some have already been exempted.
“This may spur mergers and acquisitions as firms consolidate to meet new regulations,” Moolchandani said.
“While this could create opportunities for new entrants, the overall number of advisers will likely remain stable, with competition intensifying.”
Alex Jamieson of AJ Financial Planning admits he’s concerned about the acceleration of AI innovation, not just seen in soaring share prices in this sector, but large structural shifts as advisers use sophisticated GPTs in their business.
“Tasks taking hours to completed are now being completed in as a little as 10 minutes,” Jamieson said.
“This is both to accelerate workflows and to provide deeper insights, investment opportunities, and strategies that may not have previously been explored.”
He added with 2025 being an election year, governments will no doubt have a “shopping list” of financial and tax changes, “which will be layered over the already complex legislative landscape”.
The APRA review of the capital notes and the hybrid securities market will also likely keep financial advisers on their toes.
“With a large number of retail investors enjoying over 8 per cent interest rates on their investments, the government is going to cause sizeable amounts of money possibly finding a new home,” Jamieson said.
For Kelly Wealth Services managing partner Brent Kelly staffing issues will remain a key concern for advice firms in 2025.
“The challenges are compounded by an industry-wide trend of poaching, making recruitment even more competitive,” he said.
“The financial advice industry is evolving, and staffing challenges aren’t going away. However, with creativity, adaptability, and a focus on efficiency, it’s possible to not just survive but thrive in this competitive landscape.”
