Advisers expect growth despite uphill challenges

Despite the current headwinds involving market uncertainties, rapid digitisation and the ageing population, financial advisers remain optimistic about what they can achieve over the next few years, a new report finds. However, the growth will not be captured easily.

New research from Natixis Investment Managers, conducted in collaboration with CoreData, surveyed some 2950 financial professionals across 23 countries, including 150 from Australia, to examine the challenges advisers are facing and how firms are adapting to compete and grow.

The 2026 Natixis Global Survey of Financial Advisors indicates 65% of Australian advisers are observing their clients are holding more cash in response to uncertainty, which is driving "behavioural missteps".

Most investors (77%) are reacting emotionally to headlines, while 65% of advisers are trying to time the market or chase returns, and 47% pointed to unrealistic return expectations, the report found.

With 84% of advisers identifying geopolitical uncertainty as a major risk, Natixis said keeping clients invested through periods of volatility is becoming a "critical lever" for maintaining and growing assets under management (AUM).

Meanwhile, the ageing dynamic among their client books continues to be a concern, as Australian advice books remain heavily skewed towards older clients, with Millennials making up 12.5% and Generation Z just 2.4%, compared with 25.7% and 11% globally.

Natixis noted advisers will need to apply new strategies to attract younger investors and continue to provide innovative solutions.

Many reported having integrated digital tools into their offering (34%), adding artificial intelligence (AI) capabilities to their practice (53%), and using social media to reach younger audiences (28%).

However, advisers themselves are also aging out of the industry, forcing many to consider their exit strategies especially in regional areas where an advice business is usually employed by a limited number of advisers, the report said.

Additionally, the investment manager found that of all disruptions facing advisers, AI may have the "greatest" impact on investments, as just shy of three in four (73%) expect AI has the potential to shape markets for the next 20 years.

Within their own businesses, AI adoption is also accelerating, with 67% of advisers already using the technology in their practice. Overall, 85% say AI can free up more time to spend with clients, while 74% are using it to write emails, take meeting notes and distribute educational materials.

However, 65% said integrating AI into existing workflows has been more challenging than expected.

Despite these pressures, advisers remain optimistic, with local advice firms reporting assets under management growth of 14.4% over the past year and expect a further 13.8% in the year ahead.

Natixis IM head of Australia and New Zealand Danny King said advisers are placed against rapidly changing environment and need to recognise components that are useful to thrive.

"Advisers are operating in a period of rapid change, as regulation, technology, evolving client expectations and demographic shifts converge. What is clear is that disruption is not a threat to the value advisers provide, but a catalyst for evolution," King highlighted.

"In today's uncertain economic environment, working with an adviser is one of the best ways Australians can stay on track to achieve their financial goals. To succeed in the years ahead, advisers will need to show the value they add beyond asset allocation.

"More than ever, their ability to guide clients through volatility and keep them focused on long-term outcomes will be critical."