The future is bright… but it will be a bumpy ride

Here we go again! What do we have to look forward to during the rest of 2025? Well, Trump, tariffs, and tech, for starters.

Trump and tariffs

Only recently stepping back into the White House for his second term, after a brief hiatus, Trump’s presidency has certainly started with a bang. Legislative changes being signed in on day one, troops being deployed, tariffs, and tweets being deployed too… Turns out Trump really means business as many people, industries, and countries are getting to grips with the changes that have been made so rapidly. Even the President of Colombia found out - “FAFO” tweet anybody?

This has made for interesting reality television, and it seems set to continue. For the market, it is a widely held view that Trump is going to be reflationary for the U.S. - the real question is “How reflationary will he be?” Between deportations pushing up prices in hospitality, tariffs pushing up prices of goods for consumers (it always does), and the utopian ideal of reshoring all manufacturing, it’s very likely that the numbers will trickle through before we know it.

Tech

This year my bet is we’ll see the second wave of beneficiaries to the tech/AI trade. There are so many businesses that have been created off the back of the AI trade that some of them are bound to come good. Again, for our industry, I think we’ll see tech coming out that increases the operation efficiency of businesses and advice, which will then lead to the next big question; how ethical is it to use LLMs to create a template of advice that one can look over and tweak slightly? Efficient? Yes. What the client pays for? Debatable.

Even as I was typing this, Nvidia took a 17% nosedive at the news of DeepSeek’s LLM launch - the theory being that it took significantly less time, money, and processing power to create the same - or even slightly better - product. I’ve been trying to get my login but apparently “volume of traffic” is too high so I’m yet to have a chance to play around with the newest craze in A.I. - however, this does speak to the very fickle nature of the tech industry at the moment. Is a bubble bursting? I don’t think so. Is everyone watching? Definitely.

SDR

We now have a steady trickle of funds coming through with labels - the big question is when will we start seeing many multi-asset funds breaking through with appropriate labels? It’s taking much longer than any of us expected. That’s not a bad thing, just a feeling I think most of us that are interested hold collectively.

Single strategy is fine but not exactly groundbreaking for mass usage for the IFA market as it stands. Most advisers I’ve spoken to like having a family of funds that they can rely on to satisfy a plethora of client requirements. Single strategy certainly has upsides, and could be used as a satellite holding, but does that meet the requirement of all clients? ESG has certainly lost the momentum it once had - however in my mind this year we will see the exploitation of the grey areas. How can one still call a range ESG without getting labels - does that actually sit better within an ESG framework for advisers? Are the labels more for the investors with hardcore beliefs? Time will tell.

"For the market, it is a widely held view that Trump is going to be reflationary for the U.S. - the real question is “How reflationary will he be?"

Retirement products

This year my bet is we will see the results of many hours of research, committees, project managers, working groups, intrepreneurs (yes that’s a thing), and very smart people, culminating in a new wave of retirement products.

There are already great viable solutions out there. From annuities and natural income, to blending and selling down units, there are options for advisers. However, I think this will be the year of more innovation. A year where we will see more products with slightly different USPs landing in the marketplace. This is great news for those looking to revamp their retirement offering for clients! The

Retirement Income Thematic Review has opened the door for innovation for our industry. As long as the ‘24 Autumn Budget hasn’t changed the landscape for pensions so dramatically that everyone just wants to sell their pensions down ASAP to live by the motto “here for a good time not a long time”, there will be innovation to fill the existing gaps.

In summary, 2025 is off to an exciting start and will continue to be exciting from here onward. We never quite know what’s coming down the pipeline for the year, but I expect that these few themes are a good starting point.

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