Trending Themes in Asset and Wealth Management
We are pleased to bring you the twentieth edition of "The Monthly Market Pulse - Trending Themes in Asset and Wealth Management". This edition delves into three pivotal trends significantly shaping the asset and wealth management sector:
- The New Economics of Asset Management: Winning in a Fee Compressed World - As fee compression intensifies across asset management, firms are shifting from product-led offerings to scalable, customized solution platforms that deliver personalized client outcomes
- Closing the Coverage Gap: How Simpler, Lower-Cost Retirement Solutions Are Expanding Access for Small-Business Workers - Retirement providers are expanding access to workplace savings by offering simpler, lower-cost plans and leveraging state-sponsored programs to help small businesses and underserved workers save for retirement
- From Trust to Relevance: Can AI Close Wealth Management’s Engagement Gap? - Wealth managers are using AI to enhance advisor-led personalization and engagement, ensuring trusted advice remains relevant in an increasingly digital client journey
These interconnected trends underscore a dynamic environment where evolving client expectations, a focus on comprehensive service, and a fundamental shift in investment vehicle preferences are collectively shaping the opportunities and challenges for Asset and Wealth Management firms aiming for future growth. This collective evolution signals a profound transformation across the sector, pushing firms to rethink traditional models and embrace new approaches to remain competitive and relevant
The New Economics of Asset Management: Winning in a Fee-Compressed World
Introduction
Asset managers are operating in an increasingly fee-sensitive environment as investors demand stronger outcomes, greater transparency, and more personalized investment solutions. As traditional pricing power weakens across asset classes, firms are rethinking how they create value, differentiate their offerings, and sustain profitability
- Fee pressure is entering a sharper phase for asset managers. Ropes & Gray's August 2026 Principal View report found that the mean investment-period management fee for 2026-vintage buyout funds fell to a record low of 1.57%, while half of megafunds of at least $10B offered discounts (Results are based on Preqin data covering 2026-vintage buyout funds that were raising, announced, or closed as of Jun’26)
- This signals a broader reset in which managers can no longer rely only on product breadth or legacy pricing power
Setting the Context: Several structural trends are accelerating fee compression across the asset management industry, pushing firms toward more scalable, client-centric operating models.
- BCG's 2026 Global Asset Management Report notes that institutional fees declined by 3% annually between 2010 and 2025, while revenues grew 5.1% annually against cost growth of 5.4%, limiting operating leverage despite higher AUM
- Investors are increasingly rewarding managers that solve portfolio problems, rather than simply offering investment products. Coalition Greenwich found that more than 80% of European institutions cite willingness or ability to customize as an important manager-selection criterion (Sample population: Survey of 357 European institutional decision-makers representing more than $5.5T in assets)
- However, customization does not automatically improve profitability. With only 15% of European institutions willing to pay extra for bespoke services, asset managers must find ways to deliver tailored solutions efficiently and at scale
Industry Response & Adaptation: Asset managers are responding to mounting fee pressure by expanding customized solutions capabilities, streamlining product lineups, and selectively reducing fees to remain competitive
- Invesco (Aug'26): Expanded itsGlobal Solutions & Custom Strategies platform, bringing together multi-asset strategies, model portfolios, SMAs, tax-advantaged solutions, and bespoke institutional mandates to address growing demand for customization
- Franklin Templeton (May'26): Reduced fees across selected ETF and index-based strategies to strengthen competitiveness and support broader adoption among cost-conscious investors
- Vanguard (Feb'26): Announced additional expense-ratio reductions across multiple fund offerings, reinforcing the industry's continued shift toward lower-cost investment solutions
- Russell Investments (Mar'26): Noted that customization has shifted from preference to expectation among institutional asset owners, increasing demand for tailored portfolio construction and OCIO solutions
Evalueserve Perspective
The next phase of competition in asset management will be defined by an organization's ability to deliver personalized outcomes without undermining profitability.
- Successful firms will align capabilities around client objectives such as income generation, tax efficiency, liquidity management, and risk management rather than continuously expanding product shelves
- Scalable solution platforms that integrate portfolio construction, implementation, analytics, reporting, and public-private market capabilities will become critical sources of differentiation
- Leading managers will rigorously measure customization economics through client retention, mandate expansion, delivery cost, and profitability
Closing the Coverage Gap: How Simpler, Lower-Cost Retirement Solutions Are Expanding Access for Small-Business Workers
Introduction
Millions of US private sector workers continue to lack access to a workplace retirement savings plan, making retirement readiness one of the most persistent challenges in the retirement industry. While large employers have achieved near-universal plan sponsorship, smaller firms often lag due to operational hurdles. As a result, many retirees remain heavily dependent on Social Security as their primary source of retirement income.
- Small employers (<100 employees) account for the majority (97.5%) of private-sector firms and employ roughly one-third (34%) of private-sector workers
- As policymakers and providers seek to narrow the coverage gap, the focus is increasingly shifting toward lower-cost plan designs, streamlined administration, and state-sponsored savings programs that reduce barriers to plan adoption among small employers
Setting the Context: Small businesses have long represented one of the retirement industry's largest untapped opportunities. As providers, policymakers, and state-sponsored programs work to broaden participation, recent data highlights both the progress achieved and the challenges that remain
- About half (49%) of U.S. small employers (<50 employees) offer a retirement savings plan, compared with 98% of large employers (>500 employees), according to the Center for Retirement Research (CRR) at Boston College report
- Retirement plan adoption among small businesses (2-99 employees) continues to gain momentum, with the share of firms offering a plan increasing from 19% in 2019 to 31% in 2026, while access among hourly workers rose from 21% to 38% during the same period, as per Gusto’s Retirement Savings Fall 2026 report
Industry Response & Adaptation: The retirement industry is increasingly focused on helping small businesses overcome adoption barriers and expand retirement plan coverage through simplified products, lower fees, and state-sponsored savings initiatives
- Ascensus (Aug’26): Expanded Ascensus Essentials, a small business retirement offering with streamlined onboarding, administrative fiduciary services, and a new 401(k) solution featuring Vanguard investments
- Illinois State (May’26): Illinois relaunched its state-facilitated retirement savings program for small businesses as My Illinois Savings, with lower fees, enhanced payroll integrations, and a simplified user experience
- CalSavers (May’26): CalSavers state auto-IRA program reduced participant fees by lowering both fixed annual fees and asset-based charges, making retirement saving more affordable for workers without access to employer-sponsored plans
Evalueserve Perspective: The greatest opportunity for retirement providers and policymakers lies in combining targeted education, streamlined product offerings, and state-facilitated auto-IRA programs to help small businesses navigate plan adoption and expand retirement coverage
- Education and Awareness: Many small employers continue to overestimate the cost and administrative complexity of offering a retirement plan. Providers must bridge this information gap by educating small business owners about actual plan costs and the potential value of retirement benefits for employee attraction and retention
- Product Expansion for Small Business: Providers need to introduce streamlined retirement solutions that remove operational hurdles and integrate seamlessly with existing business workflows to better serve the underpenetrated micro- and small-business segments
State-Facilitated Auto-IRA Programs: State auto-IRA programs are emerging as an effective mechanism for extending retirement savings access to uncovered workers. Expanding similar initiatives across additional states could help improve coverage rates and strengthen retirement readiness
From Trust to Relevance: Can AI Close Wealth Management’s Engagement Gap?
Introduction
Wealth management firms face a growing paradox: investors continue to trust financial advisors more than any other source of financial guidance, yet increasingly begin their financial journeys through search engines, social media, and AI-powered tools. The challenge is no longer establishing trust, but ensuring advisors remain relevant at the moment investors seek guidance
- The Edward Jones–Gallup study (Aug’26) found that 79% of Americans trust financial advisors’ expertise, yet only 32% of guidance-seekers consult an advisor. Instead, 73% research online and 19% use AI tools, although just 3% express high confidence in AI-generated financial guidance
- This engagement challenge is fueling growth for new entrants. According to Capgemini, traditional wealth managers missed nearly $1.5T in new assets under advice from 2022 to 2025, with WealthTechs and digitally enabled firms benefiting from rising demand for accessible, personalized, and frictionless experiences
Setting the Context: The challenge is becoming more pronounced as wealth-management relationships become increasingly fragmented and client expectations are shaped by always-on digital experiences
- While younger investors often begin their financial journeys through search engines, social media, and AI-powered tools, human advisors remain indispensable for complex financial decisions and long-term planning. The opportunity is to amplify trusted advice by making it as seamless, relevant, and responsive as digital channels
- The competitive advantage is no longer defined by digital or human advice alone. Instead, firms are increasingly focused on combining AI-driven insights with advisor expertise to deliver personalized, timely and continuous engagement across the client journey
Industry Response
Firms are increasingly embedding AI and workflow intelligence into advisor ecosystems to improve personalization, efficiency, and client engagement. The focus is shifting from productivity enhancement to engagement enablement
- LPL Financial (Aug’26): Introduced Latitude and its Cyan AI agent to connect advisor data, workflows, and contextual guidance within a unified operating environment, helping advisors reduce administrative effort and deliver more personalized client interactions
- SEI (Aug’26): Expanded advisor workflow capabilities by integrating meeting preparation, note capture, follow-up actions, onboarding, planning updates, and client intelligence into a single ecosystem through its collaboration with Zocks, enabling advisors to dedicate more time to client engagement
- Charles Schwab (Aug’26): Integrated AI-assisted account opening with client holdings, transaction history, and briefing tools through its integration with Zeplyn, generating advisor-ready drafts that remain subject to human review and oversight
Evalueserve Perspective
The emerging opportunity in wealth management is not advisor replacement, but advisor amplification. The next phase of competitive differentiation is likely to come from a firm's ability to operationalize client intelligence at scale, ensuring every advisor interaction is informed, personalized, and context-aware. To capitalize on this shift, wealth managers can consider:
- Building a unified client-intelligence foundation: Integrating CRM, planning, portfolio, tax, service, and communication data to create a persistent client context and eliminate repetitive information gathering across touchpoints
- Embedding AI within advisor workflows: Prioritizing use cases such as meeting preparation, onboarding, follow-up actions, next-best recommendations, and client servicing rather than relying on standalone productivity tools
- Focusing on engagement-led performance metrics: Measuring success through client responsiveness, conversion rates, wallet share, referral generation, and advisor capacity creation instead of AI adoption metrics alone
- Scaling human-in-the-loop advisory models: Leveraging AI to surface insights, coordinate information, and streamline workflows while ensuring advisors retain responsibility for recommendations, judgment, and high-impact financial decisions
