The Wealth Management Business Is Growing Fast. Here Are the Speed Bumps.

For years, the wealth management industry has been rising on a geyser of assets under management. From an estimated $27 trillion in 2018, assets are estimated at $64 trillion today and are projected by Statista Market Insights to hit $87 trillion in 2028.

But fast-growing industries face challenges. For this week’s Big Q , we asked industry professionals to identify some of them. The question: What are the biggest challenges facing the wealth management industry and why are they so important?

Alan Moore, CEO, XY Planning Network and AdvicePay: A major change is the shift from product sales to advice. It means you have to actually train on finances and advice, not just learn sales. It’s creating a spike in demand for CFP professionals—we just had the largest cycle of exam takers in the past 12 months—after the CFP has been around for 50 years. And there’s a shortage of talent who can handle being advisors.

Product organizations hired for salespeople for years and now have to adapt to hiring advice givers. It’s causing products to be reinvented with no-commission alternatives. It’s leading people to switch channels and break away—because broker-dealers are technically securities product/sales distribution platforms, and you don’t need one if you’re in the advice business.

The shift to advice has been under way for over 30 or 40 years. But the vast majority of the industry, probably 90%-plus, is still built around a product distribution business model, not around advice. You see this in recruitment efforts, where folks are being recruited into sales roles and you lose 90% to 95% of your new hires because they don’t make the cut. We don’t have 90% or 95% turnover on new hires into advice roles, but people who want to work in the advice industry are very different from the folks who want to do sales.

Ryan Parker, CEO, EP Wealth Advisors: My one-word answer as far as the biggest challenge is “people.” This has always been a talent industry. It’s about people serving people. But increasingly, the talent opportunity and challenge is getting more and more complicated and nuanced. To serve clients, it’s no longer sufficient to just have the best advisors. Plus, the best advisors are increasingly difficult to attract and to develop and to cultivate. That’s either because they’re happy with where they are, or once they get in a good situation, they probably do serve clients well by staying the course.

The talent that surrounds the client and enables the advisor, that’s where the war is really heating up. And it’s not just the financial planning or tax or estate, but it’s the technical talent—people who understand and can deploy the different technologies that are inside our industry and increasingly ubiquitous across industries. I really think that whatever your time horizon is, the ability to attract, develop, align, and then reward and retain the best talent throughout the organization is critical.

I think it starts with the front lines who are interfacing with clients every day, but it goes now to every single position. That is what’s going to separate those who are able to build something of scale and significance over time. Clients are going to go where the best talent resides. So to compete, I’m going to go for the best people.

Daniel Burke, founding partner, investment management, Callan Family Office: One of the biggest challenges facing the industry is managing the complexity and volume of all clients’ personal data.

An ultrahigh net worth family or family office often has data everywhere—siloed at multiple providers and custodians, old tax returns, et cetera. As advisors, we have to help them manage this data in order to provide good advice and execute across their full balance sheet. We’re investing more and more in data processes, data quality, and technology to help families make decisions across a clean, comprehensive set of data.

The challenge is that even if we invest to collect all of that data, the systems downstream, the third-party applications, CRMs, trading systems, reporting systems, and financial planning software, this whole ecosystem of apps and fintech investments, can’t necessarily work with all that data. The fact that so many of the technology players are focused on solving for the mass affluent leaves a real gap in the process for the ultrahigh net worth. And that’s a challenge for the industry to try to solve.

Mitch Avnet, CEO and managing partner, Compliance Risk Concepts: We provide outsourced, ongoing compliance support to asset management firms and independent investment advisors, and to the institutional folks and to broker dealers as well. To me the challenge is figuring out how to embrace new technology concepts out there, whether it’s AI, crypto, or anything else coming on the horizon Advisors have to really be thoughtful, careful and pragmatic in terms of how they leg into this stuff.

One of the biggest concerns I think any regulator or compliance officer would have when a firm gets into the world of what I call one-offs, like AI or crypto, is having the operational infrastructure expertise or capabilities to support it in place.

It’s great to say that you’re going to embrace AI. But how is that built into your overall model, specific to portfolio management? Are you just turning over the keys to a machine, or are you using it as a tool in how your team does their overall analysis and how they implement strategies? I think early entrants can get caught with their pants down when there’s a flight to a new, shiny object, if they haven’t really thought about what the potential ramifications are if something goes wrong.

Former New Hampshire Gov. Chris Sununu delivered a warning to Treasury Secretary Scott Bessent during a recent visit to Washington: Already-high airfares will surge if the war in Iran doesn’t end soon.

Sununu, a Republican who represents some of the biggest airlines as president of the industry group Airlines for America, has for weeks sounded the alarm to Trump administration officials about the economic fallout from high jet fuel prices. The war, Sununu has argued, must come to a close soon, or things will get worse.

Administration officials have gotten the message.

Privately, President Trump’s advisers are increasingly worried that Republicans will pay a political price for the rising fuel costs, according to people familiar with the matter. Many of those advisers are eager to end the war, hoping prices will begin to moderate before November’s midterm elections.

The fallout from the U.S.-Israeli attack in late February has slowed traffic through the Strait of Hormuz, a vital shipping lane, triggering a sharp increase in oil, gasoline and jet-fuel prices.

That means consumers are grappling with high costs ahead of the summer travel season, as they consider vacation plans.

Sixty-three per cent of Americans said they put a great deal or a good amount of blame on Trump for the increase in gas prices, according to a new poll conducted by NPR, PBS and Marist.

More than 8 in 10 Americans said struggles at the gas pump are putting strain on their finances.

Jet-fuel prices roughly doubled in a matter of weeks after the war began, and they have remained high. Airlines have said that will add billions of dollars of additional expenses this year, squeezing profit margins.

U.S. airlines spent more than $5 billion on fuel in March—up 30% from a year earlier, according to government data.

Carriers have been raising ticket prices, hoping to pass the cost along to consumers, and they are culling flights that will no longer make money at higher price levels.

In March, the price of a U.S. domestic round-trip economy ticket rose 21% from a year earlier to $570, according to Airlines Reporting Corp., which tracks travel-agency sales.

So far, airlines have said the higher fares haven’t deterred bookings and they are hoping to recoup more of the fuel-cost increases as the year goes on.

Earlier this week, Trump said the current price of oil is “a very small price to pay for getting rid of a nuclear weapon from people that are really mentally deranged.”

Secretary of State Marco Rubio told reporters that if Iran got a nuclear weapon, the country would have more leverage to keep the strait closed and “make our gas prices like $9 a gallon or $8 a gallon.”

Trump has taken steps in recent days to bring the war to an end. Late Tuesday, the president paused a plan to help guide trapped commercial ships out of the Strait of Hormuz, expressing optimism that a deal could be reached with Iran to end the conflict.

Crude oil prices fell below $100 a barrel on Wednesday, after reports that Iran and the U.S. are working with mediators on a one-page framework to restart negotiations aimed at ending the conflict and opening the strait.

Sununu said Trump administration officials are conscious of the economic fallout from the war: “They get it…and I think that’s why they’re trying to get through the war as fast as they can.”

But he cautioned that it could take months for prices to return to prewar levels.

“Ticket prices won’t go down immediately” after the strait is fully reopened, Sununu said. “You’re looking at elevated ticket prices through the summer and fall because it takes a while for the prices to go down.”

Since the initial U.S.-Israeli attack in late February, Sununu has met in Washington with National Economic Council Director Kevin Hassett, representatives from the Transportation Department and senior White House officials.

A White House official confirmed that Hassett and Sununu have discussed the effect of increased fuel prices on the airline industry. The official said the conversation touched on how the industry can mitigate the impact of high jet fuel prices on consumers.

“The president and his entire energy team anticipated these short-term disruptions to the global energy markets from Operation Epic Fury and had a plan prepared to mitigate these disruptions,” White House spokeswoman Taylor Rogers said, pointing to the administration’s decision to waive a century-old shipping law in a bid to lower the cost of moving oil.

Rogers said the administration is working with industry representatives to “address their concerns, explore potential actions, and inform the president’s policy decisions.”

A Treasury Department spokesman pointed to Bessent’s recent comments on Fox News that the U.S. economy remains strong despite price increases. The spokesman said Treasury officials have met with airline executives, who have reaffirmed strong ticket bookings.

“We’re cognizant that this short-term move up in prices is affecting the American people, but I am also confident, on the other side of this, prices will come down very quickly,” Bessent told Fox News on Monday.

The war has already contributed to one casualty in the industry: Spirit Airlines. Company representatives have said they were forced to close the airline because the sustained surge in jet-fuel prices derailed the company’s plan to emerge from chapter 11 bankruptcy.

The Trump administration and Spirit failed to come to an agreement for the company to receive a financial lifeline of as much as $500 million from the federal government.

Transportation Secretary Sean Duffy has argued that the Iran war wasn’t the cause of Spirit’s demise, pointing to the company’s past financial struggles, as well as the Biden administration’s decision to challenge a merger with JetBlue.

Other budget airlines have also turned to the federal government for help since the U.S.-Israeli attack. A group of budget airlines last month sought $2.5 billion in financial assistance to offset higher fuel costs, and they separately wrote to lawmakers asking for relief from certain ticket taxes.

The Wealth Management Business Is Growing Fast. Here Are the Speed Bumps.

Administration officials have spoken to the airline industry, which has voiced concerns about the rising costs.