Top investment considerations for financial advisers 2025 

In recent years, we have seen extraordinary levels of market concentration with the dominance of the ‘magnificent seven’ tech stocks. Whether that is a mere blip remains to be seen, but concentration certainly makes it harder for actively managed portfolios to outperform.

Rebecca Jacques, Mercer’s Head of Wealth Management Investment Solutions, says financial advisers are now experiencing the effects of major regime changes and economic super-cycles.

“There’s been a convergence in correlations – such as equities and bonds on a simultaneous downward trajectory.” she says.  

Three questions advisers can consider as they help their clients navigate the market in 2025:

This expanding array of innovative investment products has made it easier to diversify into asset classes that have traditionally been difficult to access, such as private markets or infrastructure. However, investors may be less diversified than they realise. Advisers will need to understand how the underlying assets in a portfolio correlate and interact with one another.

Advisers are encouraged to clearly define strategies they can implement with each asset class and allocation. It is important to consider alignment with active managers who possess deep expertise in the relevant markets – whether those are emerging markets, private credit or infrastructure assets.

There are still opportunities to unlock alpha and diversification, but it is an increasingly delicate balance between risk and opportunity. 

“You can’t just switch out high yield strategies or multi-asset credit for private debt,” says Rebecca.