AIS Financial Group: Personalized Investment Solutions for Independent Advisors

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AIS Financial Group was founded in 2016 as a Swiss investment boutique with the goal of offering personalized advisory and solutions, primarily to independent advisors in Latam, with a strong focus on structured products. Over time, they have expanded their asset offering to include investment funds, securitization, and, most recently, a bond line. The firm’s founding partner, Samir Lakkis, emphasizes that their objective is always to provide the best service and offer alternatives to those of major banks.

What drove you to create the brokerage firm?

When we started in 2016, our clients were mostly independent advisors in Latam. I came from institutions like Commerzbank and Leonteq, which covered this region with structured products, but in some cases they stopped doing so, and the offering became limited. So we thought that, given the clients’ needs, we could provide them access to major banks with high-quality structured notes. We grew gradually: 2021 was a key year because it was very positive for the whole sector. But in 2024, we made another big leap, this time for internal reasons—due to the company’s stability and maturity, with very low staff turnover. Over the years, I’ve learned that stabilizing a team and keeping it consolidated is uncommon in a brokerage firm, and it has given us more security as a company, allowing us to grow in volume.

Who are your main clients?

We started with smaller independent advisors, like the typical banker who has worked in Switzerland for years, decides to go independent, moves to Latam, and manages between 50 and 300 million dollars. From there, we kept growing in both client types and geographic coverage. We started serving slightly larger clients, like multifamily offices, single family offices, or local banks, and expanded our coverage from Latam to Switzerland, the Middle East, Israel, and South Africa. Recently, we’ve started gaining more institutional clients, such as pension funds. But the core business remains independent advisors.

Did you choose Madrid as one of AIS’s six offices because of its ties to Latin America?

Yes. The headquarters is in Geneva, but the Madrid office has grown significantly. We opened in Madrid because, unlike what happened 10 years ago, Madrid has become an alternative to Miami for Latin American clients and advisors. Although they still hold many assets in Switzerland, clients no longer go there to see their banker.

You started with structured products, but have also expanded to investment funds and securitization. What’s the company’s product structure like?

Structured products are still the core. Last year, we distributed more than 4 billion dollars in structured products across 30 countries. But we saw that we could offer clients other products, which led to a distribution agreement with Nomura, active in Argentina, Uruguay, and Panama, to help asset managers access Latam. We also offer asset securitization, for which there is strong demand.

Can you talk about each of these pillars?

90% of the products we create come from client demand—the advisors, each with their own point of view. We work to get the best terms based on their vision. As I mentioned, structured products remain the core business. With funds, we’re doing very well with Nomura, which is a strong player in fixed income, and Indian and Japanese equities.

Securitization is where we’re growing the most, because I believe alternatives are expanding. They’ve taken a while to arrive, but it finally seems like they’re here to stay among our private banking clients. Giving advisors tools so they can create their own alternatives—like taxi licenses in Colombia, artwork, or real estate—is very interesting. We create the structure so that, going back to the previous example, a group of 10 clients can buy thousands of taxi licenses without having to do it one by one. We set up a structured product, an SPV, that issues a certificate, and that certificate is what purchases the taxi licenses in Colombia. It’s about packaging something you can’t buy from a bank account, into a product you can buy from your account.

You’ve also recently ventured into a bond line…

Yes, we started bond trading, also as a response to client demand. Just like with structured products, it arose as an option to offer them a better product.

Which sectors do you see as attractive in the coming months?

After many years where everyone was focused on growth and not so much on value, we’re now seeing a shift from the U.S. to Europe, which we hope will continue.

Are there differences in client demand by country or region?

I think it relates to the origin of the wealth. In both Latam and the Middle East, it’s entrepreneurs who have built their own wealth—not inherited it over four generations—so they’re much more willing to take risks. That’s why there’s a greater appetite for alternative products, higher coupons, more aggressive strategies. In Europe, they lean a bit less toward alternatives and more toward fixed income. In Spain specifically, there’s a strong focus on funds due to tax benefits.

Trump’s Tariff Shock: This Is Just the Beginning

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It was quite a show: U.S. President Donald Trump announced his sweeping tariff policy flanked by whiteboards filled with figures and names. The first reactions varied: Mexico and most Latin American countries felt the blow wasn’t as bad as expected, while Europeans expressed astonishment at the “punishment” coming from a supposed ally. Analysts agree on one thing: this is just the beginning.

Reciprocal Tariffs, Universal Tariffs: Making Sense of It All

From the televised charts to actual figures, there’s a long road—and analysts are trying to gauge the scope of this shift in the foundations of global trade.

For Mexico and Canada, the worst-case scenarios didn’t materialize: the list of so-called “reciprocal” tariffs did not include the U.S.’s trade partners under the USMCA. In Mexico’s case, this means that products complying with the agreement will continue to face 0% tariffs, while non-compliant products will now be hit with a 25% tariff.

However, measures under the International Emergency Economic Powers Act (IEEPA), targeting fentanyl and migration, remain in force, according to the White House. This leaves both Mexico and Canada exposed to further Trump sanctions. On top of that, sector-specific tariffs—on steel or automobiles, for instance—are still on the table.

So what does a “universal tariff” actually mean? For now, institutions like Barclays have made average estimates and suggest the new scheme amounts to a global 20% tariff—“the most extreme scenario the market had contemplated so far,” according to a report by Argentine firm Adcap.

Beyond Mexico, most Latin American countries have been hit with a reciprocal tariff of 10%. To put that in perspective, a country like Argentina had a 2.5% tariff rate before April 2. That’s now quadrupled.

Leonardo Chialva, portfolio manager and partner at Delphos Investment, breaks it down: “We can split this into two parts: a general 10% tariff for all countries, and extra tariffs for 60 so-called ‘abusive’ nations. The first seems to be a foundational move aimed at implementing a fiscal adjustment plan financed through a massive tax on all imports (with some exceptions). The second appears to be a negotiation tactic to ‘level the playing field’ in international trade.”

“Some analysts have suggested that the ‘extra’ tariffs were calculated using a simplistic formula: applying the ratio between the U.S. trade deficit with a given country and its total imports from that country. In other words, those exaggerated rates might not be based on any real analysis of tariffs or trade imbalances,” Chialva adds.

Waiting for a Reaction in Samarkand

Even geopolitics can have poetic moments. European Commission President Ursula von der Leyen was attending the EU–Central Asia summit in the fabled city of Samarkand, Uzbekistan—an event she referred to as “Liberation Day.” From there, she noted the EU would assess the impact of the new 20% tariffs and explore negotiation channels.

China, which faces a 34% “reciprocal” tariff on top of sector-specific ones, initially responded with restraint. As of press time, it had not announced any retaliatory measures.

Brazil, on the other hand, issued an official protest—despite some financial analysts seeing opportunities in the reshuffling of global trade.

In a joint statement, Brazil’s Ministries of Foreign Affairs and of Development, Industry, Trade and Services said the move “violates the United States’ commitments to the World Trade Organization and will impact all Brazilian goods exported to the U.S.”

The statement also questioned the U.S. justification of seeking “trade reciprocity.” According to U.S. government data cited in the same statement, the U.S. had a trade surplus of $28.6 billion with Brazil in 2024, when including both goods and services.

Liberation Day or Recession Day?

In the U.S., Trump’s policy is far from receiving unanimous support. Democrats went for an easy rhyme and dubbed the day “Recession Day.”

A special report by Argentine firm Adcap highlighted a key point: tariffs are taxes on imports. While historically a major source of U.S. government revenue, they now account for less than 3% of federal income. With his new package, Trump aims to raise up to $700 billion annually—almost nine times more than current tariffs generate.

Fernando Marengo, chief economist at BlackToro (a Miami-based RIA of Argentine origin), argued: “The notion that tariffs have significant revenue-generating power is misleading. U.S. imports represent less than 15% of GDP. Applying a 10% tariff across the board would yield only 1.5% of GDP. Some countries have higher tariff rates, but even so, the impact on the deficit would be minimal, because taxing imports affects both volume and prices, further reducing the real impact. Tariffs are a one-time adjustment—they change relative prices. They make imported goods more expensive compared to local goods, which discourages consumption and encourages domestic production. But the capacity to ramp up production in the short term is limited.”

Marengo concluded: “The U.S. is destined to run external deficits as long as the dollar remains the world’s reserve currency. Whenever the world needs liquidity, the only one who can provide it is the Fed. In return, the U.S. demands goods. That imbalance—between global demand for dollars and U.S. demand for goods—automatically creates a trade deficit.”

Opportunities in a Global Realignment

Some Mexican analysts view the tariff shock as a potential opportunity: reduced trade with the U.S. may open market space for others.

Latin American countries are turning their gaze to Asia. Brazilian equity chief Rodrigo Moliterno, of Veedha Investimentos, believes Brazil could benefit indirectly from the new U.S. measures. “Asian economies will likely look to Brazil as an alternative for trade or sourcing, instead of dealing with the U.S. under this new tariff regime,” he said.

Morgan Stanley Wealth Management Imposes Four Days of In-Office Work Per Week

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Financial advisors and employees at Morgan Stanley Wealth Management will be required to be in the office at least four days a week starting May 5, according to an internal communication sent to staff on Monday, which Funds Society has seen.

“Much has changed since the height of COVID,” began the memo, signed by Jed Finn, Head of Wealth Management at the investment bank. “What hasn’t changed, however, is that the vast majority of us do our best work when we’re together in person,” he added.

In another section, Finn emphasized that the success of the business depends on personal relationships and the informal interactions that happen when people share the same space. The note also stated that supervisors are expected to be in the office five days a week unless they have an approved exemption.

Financial firms have been assertive in demanding employees return to the office after the pandemic began affecting the U.S. in 2020, leading to more flexible work policies and the widespread adoption of remote work.

Although Finn acknowledged in his message that “there’s a lot of passion on all sides of this issue,” he maintained that “to continue growing the business and ensure we meet our goals—not just for the current team, but for the future—we believe spending more time together in person will improve our effectiveness.”

In 2022, Morgan Stanley limited remote work to 90 days a year with no exceptions. In January, JP Morgan asked its hybrid employees to return to the office five days a week starting in March, sparking hundreds of comments and complaints from staff, according to Reuters.

Finn’s note also indicated that exceptions might be considered. “We know that in an organization of our size, with a diverse mix of businesses, locations, and roles, there will be situations where more flexibility in work arrangements is required—or even preferred,” he wrote. “With manager and/or advisor approval, those situations may continue,” he added.

Global Growth Forecasts Slashed Dramatically Due to U.S. Trade War

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Fitch Ratings has just published a damning report outlining the consequences of the trade war launched by the U.S. government: it will reduce growth in both the U.S. and globally, drive up inflation in the U.S., and delay interest rate cuts by the Federal Reserve.

“We have cut our U.S. growth forecast for 2025 from 2.1% to 1.7% in the December 2024 Global Economic Outlook (GEO), as well as our 2026 forecast from 1.7% to 1.5%. These rates are well below trend and lower than the nearly 3% annual growth seen in 2023 and 2024,” the note states.

Fiscal easing in China and Germany will cushion the impact of increased U.S. import tariffs, but growth in the eurozone this year will still fall well short of what was forecast in December. Mexico and Canada will experience technical recessions given the scale of their trade exposure to the U.S., prompting the ratings agency to cut their 2025 annual forecasts by 1.1 and 0.7 percentage points, respectively.

“We forecast that global growth will slow to 2.3% this year, well below trend and down from 2.9% in 2024. This 0.3 percentage point downward revision reflects widespread reductions across developed and emerging economies. Growth will remain weak at 2.2% in 2026,” Fitch adds.

The magnitude, speed, and breadth of U.S. tariff hike announcements since January are alarming, the firm notes. The effective tariff rate (ETR) in the U.S. has already risen from 2.3% in 2024 to 8.5% and is likely to continue increasing: “Our latest economic forecasts assume an ETR of 15% will be imposed on Europe, Canada, Mexico, and other countries in 2025, and 35% on China. This will raise the U.S. ETR to 18% this year, before moderating to 16% next year, as the ETR for Canada and Mexico falls to 10%. This would be the highest rate in 90 years.”

“There is enormous uncertainty surrounding the extent of U.S. measures, and our assumptions could be too severe. However, there are also risks of a greater tariff shock, including an escalation of the global trade war. In addition, the U.S. government has set an import substitution agenda — aimed at boosting U.S. manufacturing and reducing the trade deficit — which it believes can be achieved through higher tariffs,” the note adds.

The tariff hikes will lead to higher consumer prices in the U.S., lower real wages, and increased business costs, while rising political uncertainty will negatively affect business investment. Retaliation will hit U.S. exporters. Export-oriented global manufacturers in East Asia and Europe will also be affected. Models suggest the tariff increases will reduce GDP by around one percentage point in the U.S., China, and Europe by 2026.

The recent implementation of fiscal stimulus in Germany will greatly help cushion the blow and allow its economy to moderately recover in 2026. More aggressive policy easing will also help offset the impact in China. Since the tariff impact is estimated to add 1 percentage point to short-term inflation in the U.S., Fitch believes the Fed will delay further easing until the fourth quarter of 2025. Currently, it forecasts only one rate cut this year, followed by three more in 2026 as the economy slows and tariff levels stabilize.

UBS AM Launches Its First Two Nasdaq-100 ETFs

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UBS Asset Management (UBS AM) has announced the launch of two new UCITS ETFs that offer exposure to the Nasdaq-100 Notional and Nasdaq-100 Sustainable ESG Select Notional indices. According to Clemens Reuter, Head ETF & Index Fund Client Coverage, UBS Asset Management, “these are the first two Nasdaq-100 ETFs we are launching, giving clients the option to choose between the iconic index and the sustainable version of the same benchmark.”

Regarding the funds, they state that the UBS ETF (IE) Nasdaq-100 UCITS ETF passively replicates the Nasdaq-100 Notional Index, which is composed of the 100 largest U.S. and international non-financial companies listed on the Nasdaq Stock Market, based on market capitalization. The index includes companies from various sectors such as computer hardware and software, telecommunications, retail/wholesale, and biotechnology. The manager clarifies that the fund is aligned with Art. 6 under SFDR and is physically replicated.

Meanwhile, the UBS ETF (IE) Nasdaq-100 ESG Enhanced UCITS ETF passively replicates the Nasdaq-100 Sustainable ESG Select Notional Index, which is derived from the Nasdaq-100 Notional Index. Companies are evaluated and weighted based on their business activities, controversies, and ESG risk ratings. Companies identified by Morningstar Sustainalytics as having an ESG risk rating score of 40 or higher, or as involved in specific business activities, are not eligible for inclusion in the index. The ESG risk rating score indicates the company’s total unmanaged risk and is classified into five risk levels: negligible (0–10); low (10–20); medium (20–30); high (30–40); and severe (40+).

In addition, the ESG risk score of the index must be 10% lower than that of the parent index at each semi-annual review. A lower index-weighted ESG risk score means lower ESG risk. The fund is physically replicated and aligned with Art. 8 under SFDR.

According to the manager, the UBS ETF (IE) Nasdaq-100 UCITS ETF will be listed on SIX Swiss Exchange, XETRA, and London Stock Exchange, while the UBS ETF (IE) Nasdaq-100 ESG Enhanced UCITS ETF will be listed on SIX Swiss Exchange and XETRA.

Ocorian Strengthens Its U.S. Team and Appoints Amy Meza as Director of Fund Accounting

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Ocorian, a provider of services to asset managers, has appointed Amy Meza as Director of Fund Accounting, strengthening its Fund Services team in the United States.

Based in Dallas, she will report to Lynne Westbrook, Head of Fund Services, adding further experience and expertise to Ocorian’s expansion in the U.S. following the acquisition of EdgePoint Fund Services in December of last year, according to the company’s statement.

Meza was previously Vice President of Financial Control at Zip Co Limited and CFO at Direct Access Capital, and she brings extensive experience in global financial services, private equity, treasury management, and change management. She began her career at Deloitte and also served at JP Morgan Chase as Fund Accounting Manager and at SS&C Technologies as Associate Director of Fund Accounting.

“The appointment of Amy brings additional experience and knowledge to Ocorian, and she will make a significant contribution as we continue to build our business in the U.S.,” said Lynne Westbrook.

For her part, Amy Meza added: “Ocorian is ambitious in growing its U.S. business, which makes this an exciting time to join, and I’m looking forward to supporting colleagues and clients in helping achieve our expansion plans.”

Ocorian first entered the U.S. market in 2021 with the acquisition of Emphasys Technologies, based in Philadelphia. Since then, the company has been enhancing its onshore capabilities, making key hires, and expanding its service offering to support its growing client base, recently announcing the acquisition of EdgePoint in Dallas, Texas. Through its operations in New York, the company provides fund managers, private clients, and corporates with access to fund structuring and domiciliation hubs around the world—from Europe and the Middle East to the Caribbean, Latin America, Africa, and Asia-Pacific.

Wealth Managers Turn to AI and Private Assets to Boost Their Business

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For wealth managers, growth has been strong over the past five years, with a global increase of 20% in assets under management (AuM). According to the Wealth Industry Survey by Natixis IM, the pursuit of growth is even greater this year, as firms project an average increase of 13.7% in wealth just in 2025. However, given geopolitical changes, economic uncertainty, and accelerated technological advances, investment leaders know that meeting these expectations will not be an easy task.

Geopolitics and Inflation: Key Concerns

The results show that while 73% are optimistic about market prospects in 2025, macroeconomic volatility remains a major concern. 38% of respondents cite new geopolitical conflicts as their main economic concern, closely followed by inflation, with 37% of respondents fearing that it may resurge under Trump’s policies. Additionally, 66% anticipate only moderate interest rate cuts in their regions.

Despite these concerns, 68% of analysts state that they will not adjust their return expectations for 2025, as wealth managers are implementing strategies for their businesses, the market, and most importantly, their clients’ portfolios, with the aim of delivering results.

In addition to new geopolitical conflicts and inflation, respondents also identified other concerns for 2025. 34% point to the escalation of current wars, and another 34% highlight U.S.-China relations. Lastly, 27% underscore the tech bubble as another factor to consider.

With this in mind, wealth managers are carefully considering how geopolitical turbulence and persistent inflation will impact the macroeconomic environment. Half of the respondents forecast a soft landing for their region’s economy, with the strongest sentiment in Asia (68%) and the U.S. (58%). However, this drops to 46% in Europe and just 37% in the U.K. Additionally, 61% are concerned about stagflation prospects in Europe.

Regarding the specific impacts of the U.S. elections on the economic outlook, two-thirds globally are concerned about the possibility of a trade war. However, wealth managers also see opportunities on the horizon, as 64% believe that the regulatory changes proposed by the Trump administration will drive the development of innovative investment products.

In addition, two-thirds believe that the proposed tax cuts will drive a sustained market rally. Taking all of this into account, 57% globally say that, in light of the U.S. election outcome, clients are more willing to take on risk, with the potential to disrupt the cash accumulation pattern investors have maintained since central banks began raising rates.

The Investment Potential of AI

After witnessing the rapid development of generative AI models, 79% of surveyed wealth managers say that AI has the potential to accelerate profit growth over the next 10 years. With this in mind, firms are looking to leverage the benefits of the new technology in three key areas: tapping into the investment potential of AI, implementing AI to improve their internal investment process, and using AI to optimize business operations and customer service.

69% of respondents say that AI will improve the investment process by helping them uncover hidden opportunities, and another 62% say that AI is becoming an essential tool for assessing market risks. In fact, the potential is so significant that 58% say that companies that do not integrate AI will become obsolete.

With this in mind, 58% say their company has already implemented AI tools in their investment process. The highest concentration of early adopters is found among wealth management firms in Germany (72%), France (69%), and Switzerland (64%).

Beyond investment opportunities and portfolio management applications, wealth managers also anticipate that AI will impact the service side of the business. Overall, 77% say that AI will help them meet their growth goals by integrating a wider range of services. However, the technology can be a double-edged sword, as 52% also fear that AI is helping turn automated advice into a real competitive threat.

“Wealth managers face a wide range of challenges in 2025, from educating their clients on the benefits of holding private investments to finding the best ways to integrate AI into their investment and business processes. However, despite potential obstacles, wealth managers are confident that they can harness disruptive forces to unlock new opportunities and meet the AUM growth goals they need to achieve in 2025,” says Cecile Mariani, Head of Global Financial Institutions at Natixis IM.

Appetite for Private Assets Continues to Grow

Technology may have the potential to transform the industry, but firms face more immediate challenges in meeting clients’ investment preferences and return expectations.

Wealth managers are exploring a wider range of vehicles and asset classes to meet their clients’ needs. Globally, portfolios now consist of 88% public assets and 12% private assets, a ratio that is likely to shift as focus on private assets increases. Additionally, 48% state that meeting the demand for unlisted assets will be a critical factor in their growth plans.

However, private asset allocation is not without its challenges. 26% of respondents consider access to these assets—or lack thereof—a threat to their business. Despite this, new product structures are helping to ease this pressure, with 66% noting that private asset vehicles accessible to retail investors improve diversification.

The next challenge will be financial education, as 42% believe that a lack of understanding about liquidity is a barrier to incorporating private assets into client portfolios. Nevertheless, the lack of liquidity can also work in favor of some investors, given that 75% of wealth managers globally say that the long-term nature of retirement savings makes investment in private assets a sound strategy.

Overall, 92% plan to increase (50%) or maintain (42%) their private credit offerings, and similarly, 91% plan to increase (50%) or maintain (41%) their private equity investments on their platforms. Few among the respondents see this changing, as 63% say that there is still a significant difference in returns between private and public markets. Additionally, 69% say that despite high valuations, they believe private assets offer good long-term value.

The 2025 Wealth Management Industry Survey by Natixis Investment Managers gathers the views of 520 investment professionals responsible for managing investment platforms and client assets across 20 countries.

Paulina Esposito (LarrainVial): The financial advisor who listens, wins

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Paulina Esposito, Head of Sales Uruguay – Argentina at LarrainVial

Paulina Esposito, the newly appointed Head of Sales Uruguay – Argentina at LarrainVial, is a distinguished professional with over 25 years of experience in the sector. She shares her insights with FlexFunds and Funds Society through The Key Trends Watch initiative, reflecting on the challenges and opportunities that have shaped her career.

As Head of Sales, she aims to position the company as a key player in the region by leveraging its multi-manager model to offer investment strategies based on rigorous analysis and strategic vision. To achieve this, she considers it essential to build trust and communicate the company’s value effectively.

In her approach, Esposito underscores the importance of selecting timeless investment strategies that can endure market fluctuations over time. These strategies are based on consistent processes and strong management teams, enabling investors to navigate volatility confidently. Additionally, she emphasizes the need to educate clients, helping them understand what they are investing in and why a particular investment is suitable for their portfolio.

What are the most important trends currently shaping the asset management industry?

Two key areas stand out: technology and alternative assets. Technological innovation is transforming the industry, driven by a new generation with different training and mindsets. Meanwhile, alternative assets such as private credit and direct lending are gaining relevance, offering stability and diversification in emerging markets like Latin America.

How do you think the industry will evolve—toward separately managed accounts (SMAs) or collective investment vehicles?

The industry will likely adopt a hybrid model combining separately managed accounts (SMAs) and collective investment vehicles. The diversity of clients and capital requires flexible solutions. While high-net-worth investors often seek personalized management due to their specific interests and ability to seize unique opportunities, collective investment vehicles are ideal for more diversified, lower-volume portfolios. In this context, both approaches can coexist and complement each other based on client profiles and needs.

What is the biggest challenge in capital raising and client acquisition today?

One of the most significant challenges is understanding each client’s evolving needs deeply. The key lies in active listening. Today’s investors assess more complex factors than before and seek more than just returns—they want trust, consistency, and a personal connection with their advisors.

This approach requires discipline, consistency, and effective communication that prioritizes client expectations over personal preferences. Becoming a trusted advisor means listening actively and adapting communication to ensure clients feel understood.

What factors do clients prioritize when making investment decisions today?

Decision-making dynamics are shifting. While clients still seek returns, they are increasingly focused on managing volatility and understanding how products behave in turbulent markets. Additionally, investors are paying closer attention to managers’ track records and ability to navigate challenging scenarios.

Liquidity has also become a critical factor, particularly for alternative products. Although alternative investments can provide stability and diversification, their illiquid nature must be explained and understood by clients. Designing a well-balanced portfolio is essential—one that combines liquid assets such as bonds, equities, and funds with global diversification to mitigate the risks associated with sector-specific fluctuations.

How is technology transforming the asset management sector?

Technology is forcing all financial sector players to stay constantly updated. This presents a significant challenge for advisors, as younger generations naturally possess strong technological skills.

Integrating these tools is not just necessary for advisors—it is an opportunity to add value in an environment where technology has made investment platforms and options more accessible. Younger clients are already leveraging these advancements to build savings more efficiently. The challenge, therefore, is to understand these new dynamics while maintaining the relevance of human advisors, particularly in direct client interactions and the personalization of investment strategies.

The impact of artificial intelligence on investment management

According to Esposito, artificial intelligence is beginning to play a crucial role in investment analysis. Many investors already use AI-driven platforms that provide specific recommendations for portfolio adjustments. This pushes advisors to be more proactive and adapt quickly to emerging client needs.

In the past, clients tended to hold certain investments for extended periods. However, AI-generated alerts are now driving a trend of continuous portfolio adjustments. “This shift underscores the importance of communication and client proximity. Without these interactions, advisors risk losing their role in portfolio management.”

In her view, the most critical skills investment advisors need to develop are “active listening and effective communication.” Beyond mastering the technical aspects of financial products, an advisor must understand clients’ needs, goals, and concerns. “The ability to tailor strategies to each client and communicate ideas clearly and simply is crucial in an environment where not all clients have the same level of financial sophistication,” Esposito emphasizes.

Trends and challenges in the coming years

The financial sector is undergoing a generational shift over the next 5-10 years. The younger generations, raised in the digital era, will have different expectations and become more familiar with technological tools. This means the biggest challenge for advisors will be finding ways to add value beyond what technology can offer.

Looking ahead, Esposito highlights key themes and strategies essential for a diversified portfolio. Private credit, infrastructure trends, and global equity positions will be crucial. Additionally, opportunities in emerging markets—particularly in Latin America—should be considered. Countries like Argentina present attractive possibilities but have inherent risks, requiring active management.

Finally, reflection and portfolio rebalancing become indispensable in a constantly evolving market. More than ever, Esposito emphasizes, “the ability to listen, communicate, and anticipate will distinguish those who lead the change from those who fall behind.”

The interview was conducted by Emilio Veiga Gil, Executive Vice President of FlexFunds, as part of the Key Trends Watch initiative by FlexFunds and Funds Society.

Democratization: Larry Fink’s Key Word for the Markets and for BlackRock

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Photo courtesyLarry Fink, BlackRock's CEO.

As he does every year, Larry Fink, CEO of BlackRock, has published his annual letter to investors, in which he analyzes the long-term forces shaping the global economy and how BlackRock is helping its clients navigate these dynamics and seize emerging opportunities.

What stands out is that in the opening lines of his letter, he acknowledges that investors are nervous. “I hear it from nearly every client, nearly every leader, nearly every person I speak with: they’re more worried about the economy than at any time in recent memory. And I get it. But we’ve been through moments like this before. And somehow, over the long term, we find a way through,” he writes.

To explain how the asset manager is approaching today’s environment and its view of the world, the letter opens by highlighting a key principle of BlackRock’s business: that capital markets can help more people experience the growth and prosperity that capitalism can deliver.

“Of all the systems we’ve created, one of the most powerful — and especially suited for moments like this — began over 400 years ago. It’s the system we invented specifically to overcome contradictions like scarcity amid abundance and anxiety amid prosperity. We call this system the capital markets.”

The CEO highlights that investors have benefited from the greatest period of wealth creation in human history, noting that in the last 40 years, global GDP has grown more than in the previous 2,000 years combined. He argues that this extraordinary growth — driven in part by historically low interest rates — has generated exceptional long-term returns. However, he acknowledges that not everyone has shared in this wealth.

Fink concedes that capitalism has clearly not worked equally for everyone, and that markets are not perfect. To change this, he believes the answer is not to abandon the markets, but to expand them: “to complete the democratization of the market that began 400 years ago and enable more people to have meaningful participation in the growth happening around them.” How can investment continue to be democratized? In his view, there are two general ways: helping current investors access parts of the market that were previously out of reach, and enabling more people to become investors from the outset.

“More investment. More investors. That’s the answer. Since BlackRock is a fiduciary and the world’s largest asset manager, some readers might say I’m talking my book. That’s understandable. But it’s also the path we consciously chose, long before it was fashionable. From the beginning, we believed that when people can invest better, they can live better — and that’s exactly why we created BlackRock,” he states.

Unlocking Private Markets

In Fink’s view, the assets that will define the future — such as data centers, ports, power grids, and the world’s fastest-growing private companies — are not available to most investors. “They are in private markets, locked behind high walls, with doors that only open to the largest or wealthiest market participants. The reason for this exclusivity has always been risk. Illiquidity. Complexity. That’s why access is limited to certain investors. But nothing in finance is immutable. Private markets don’t have to be so risky, opaque, or out of reach — not if the investment industry is willing to innovate. And that’s exactly what we’ve been working on at BlackRock over the past year.”

In this vein, over the last fourteen months, BlackRock has acquired Global Infrastructure Partners (GIP) and Preqin, and announced the acquisition of HPS Investment Partners. According to the CEO, these moves enable broader access to private markets for more clients and provide investors with greater choice. “BlackRock is transforming the future of our industry to better serve today’s clients,” he adds.

The Big Retirement Question

For BlackRock, these strategic moves are driven by the mismatch between investment demand and capital available from traditional sources. Capital markets can help fill that gap. In this regard, the CEO explains how democratizing investment can help more people secure their financial future and that of their families.

In the letter, he outlines ideas such as helping people start investing earlier and giving retirees the peace of mind and security needed to spend in retirement. “A good retirement system acts as a safety net that protects people when they face hardship. But a great system also offers a path to build savings, accumulating wealth year after year,” he notes. More than half of the assets managed by BlackRock are for retirement funds. “It’s our core business, and that makes sense: for most people, retirement accounts are their first — and often only — experience with investing. So if we truly want to democratize investing, retirement is where the conversation has to start,” he adds.

Focusing on the U.S., he considers the situation there to be critical: “Public pension systems are facing massive shortfalls. Nationally, data shows they are only 80% funded — and that number is likely too optimistic. Meanwhile, one-third of the country has no retirement savings at all. As money becomes scarce, people are living longer. Today, if you’re married and both partners reach age 65, there’s a 50% chance that at least one of you will live to 90.”

In response, he highlights that last year, BlackRock launched LifePath Paycheck® to address this fear. “It offers people the option to convert 401(k) retirement savings into a steady, reliable monthly income. In just 12 months, LifePath Paycheck® has already attracted six plan sponsors representing 200,000 individual retirement savers,” he explains.

A Look at Europe

On major market trends, Fink also shared his views. Regarding Europe, he believes the continent is waking up and wonders if it’s time to turn bullish on the region. “The policymakers I speak with — and I speak with many — now recognize that regulatory barriers won’t disappear on their own. They must be addressed. And the potential is enormous. According to the IMF, reducing internal trade barriers within the EU to the level that exists among U.S. states could boost productivity by nearly 7%, adding a staggering $1.3 trillion to the economy — the equivalent of creating another Ireland and another Sweden,” he states.

He adds that the biggest economic challenge facing the continent is the aging workforce: “In 22 of the 27 EU member states, the working-age population is already shrinking. And since economic growth largely depends on the size of a country’s labor force, Europe faces the risk of a prolonged economic slowdown.” The letter highlights that BlackRock manages $2.7 trillion for European clients, including around 500 pension plans supporting millions of people.

It also notes that ETFs contribute to developing an investment culture in Europe, making it easier for more individuals to reach their financial goals by using capital markets: “When first-time investors start entering capital markets, they often do so through ETFs — and particularly iShares. We are working with established players, as well as several newcomers to Europe, such as Monzo, N26, Revolut, Scalable Capital, and Trade Republic, to lower investment barriers and build financial literacy in local markets.”

Tokenization: The Great Revolution of Democratization

While expanding access to capital markets requires innovation and effort, Fink believes it’s not an insurmountable challenge. As an example of such innovation, he points to tokenization as a clear step toward democratization. In his view, if SWIFT is like postal mail, then tokenization is email: assets move directly and instantly, bypassing intermediaries.

“What exactly is tokenization? It’s the process of turning real-world assets (stocks, bonds, real estate) into digital tokens that can be traded online. Each token certifies your ownership of a specific asset, much like a digital deed. Unlike traditional paper certificates, these tokens live securely on a blockchain, enabling instant buying, selling, and transferring — without cumbersome paperwork or waiting periods. Every stock, every bond, every fund, every asset can be tokenized. If they are, it will revolutionize investing. Markets would no longer need to close. Transactions that now take days could settle in seconds. And billions of dollars currently trapped by settlement delays could be immediately reinvested into the economy, generating more growth,” he explains.

In his view, perhaps most importantly, tokenization makes investing far more democratic. “It can democratize access, shareholder voting, and returns. One day, I hope tokenized funds become as familiar to investors as ETFs — provided we solve one critical issue: identity verification,” Fink concludes.

SEC Votes to End Defense of Climate Disclosure Rules

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On Thursday, March 27, the SEC voted to end its defense of rules requiring the disclosure of climate-related risks and greenhouse gas emissions.

Acting SEC Chair Mark T. Uyeda stated: “The purpose of the Commission’s action and today’s notice to the court is to cease its involvement in defending the costly and unnecessarily intrusive climate change disclosure rules.”

The rules, adopted by the Commission on March 6, 2024, established a special, detailed, and extensive disclosure regime regarding climate risks for reporting and emitting companies.

The rules have been challenged by states and individuals. The litigation was consolidated in the Eighth Circuit (Iowa v. SEC, No. 24-1522 (8th Cir.)), and the Commission had previously stayed the effectiveness of the rules pending the outcome of the case. Briefing in the case was completed before the change in administration.

Following the Commission’s vote, SEC staff sent a letter to the court stating that it was withdrawing its defense of the rules and that Commission attorneys are no longer authorized to present arguments in support of the Commission’s brief. The letter indicates that the Commission defers to the court on the timing of oral arguments.