The U.S. financial advisory industry is facing a major generational shift. Approximately 35% of financial advisors, controlling 40% of industry assets, plan to retire over the next decade, with more than a quarter showing uncertainty regarding their succession plans within their firms. According to Cerulli Associates, this reality highlights the pressing need for wealth management firms to better attract and retain the next generation of talent.
Additionally, pressure is mounting on firms to establish comprehensive and effective training programs that equip junior advisors with the tools and skills required for long-term success. “Providing advisors with the resources and guidance needed to develop succession plans and transfer client portfolios to the next generation will be crucial for wealth management firms,” they note in one of their latest analyses.
However, many training managers have identified obstacles in selecting and developing junior profiles. According to Cerulli, 73% of these professionals point to the time required to learn the business as a major challenge, followed by 67% who state that daily instruction consumes too much time.
Cerulli recommends that firms adopt a longer-term approach when onboarding young, qualified talent. “Junior advisors integrated into broader advisor teams with long-term career development plans will be better positioned to create natural retirement and business succession pathways for senior advisors, who can monetize their practice while transitioning it to highly qualified financial advisors within their own firm,” states Olivia Morgan, analyst at Cerulli.
In the consulting firm’s experience, practices that adopt this approach and highlight it during recruitment processes will be far more likely to attract top-qualified candidates interested in wealth management—particularly those who prioritize a sustainable, long-term career path. “A long-term strategy functions as both a retention and recruitment tool, fostering a high-quality pipeline of new and existing advisors to seamlessly manage the transition stemming from industry retirements,” Morgan concludes.
\Private markets are entering a new growth phase, as strong investor demand and expanded access for retail investors reshape how capital is raised, structured, and distributed, according to new research by State Street Corporation.
The fifth annual Private Markets Study from State Street, titled “Resilience Meets Opportunity,” shows that demand in private markets remains exceptionally resilient, even against a backdrop of geopolitical uncertainty, inflationary pressures, and market volatility. Only 7% of firms expect to reduce their allocations, while half plan to increase their exposure, reinforcing the role of private markets as an essential component in long-term portfolio construction.
Retail Participation
At the same time, the sector is undergoing a structural shift toward retail investor participation as firms broaden access through wealth management channels. Specifically, more than 84% of asset and wealth managers already offer or plan to offer private market strategies to retail investors, demonstrating that retail access has moved from a long-term ambition to a core component of industry strategy.
“The private markets story is defined by resilience on one side and reinvention on the other. Demand remains strong, but bringing private markets to a broader investor base at scale is fundamentally reshaping how the industry operates. Success will depend on who can manage complexity and deliver consistent results to a much broader set of clients,” explains Joerg Ambrosius, President of Investment Services at State Street.
According to the firm, while expanding access to retail investors remains the primary opportunity, firms are taking a more measured approach regarding the pace of growth. The report notes that around 43% of organizations now expect retail-oriented vehicles to account for at least half of private market fundraising within the next three years (down from 56% in the previous year’s survey), reflecting a more realistic view of distribution and operational challenges. Demand is driven mainly by diversification and return potential, as well as access to key investment themes.
Capital Allocation Trends
The study also points to a clear shift in where capital is directed. Findings indicate that artificial intelligence and AI infrastructure rank as the top investment theme globally, underscoring the role of private markets in financing long-term structural growth across economies.
“Even in a more uncertain environment, private markets are increasingly where investors access the most important long-term growth trends, serving as a critical source of return and diversification. AI, infrastructure, and other structural opportunities are reinforcing the role of this asset class as a core allocation in portfolios. Firms will need to keep adapting to meet demand from a broader range of investors,” comments Donna Milrod, Chief Product Officer at State Street.
As firms scale their private market strategies toward retail investors, operational complexity emerges as the ultimate hurdle while asset and wealth managers adapt to serve a larger, more diverse client base. In this regard, nearly eight out of ten respondents cite liquidity management as a key challenge, with specific pain points including redemption management, cash forecasting, and liquidity stress testing as firms adjust to more dynamic investor flows. Regulatory compliance, reporting, and investor servicing are also intensifying as firms expand beyond their institutional client bases.
“Democratization is raising the bar for how private markets are structured and supported. Delivering these strategies at scale requires more than product innovation. It demands the operational, data, and infrastructure capabilities needed to deliver transparency, manage liquidity, and meet the expectations of a very different investor base,” clarifies Scott Carpenter, Global Head of Alternatives at State Street.
The Distribution Channel
The study highlights a clear consensus on distribution: wealth management platforms are viewed as the primary channel to access private markets, whereas defined contribution structures remain a secondary route for most firms. According to State Street, this reflects both investor suitability considerations and the role of financial advisors in navigating more complex investment structures.
Furthermore, the survey reveals that institutional investor demand for private markets remains remarkably resilient despite ongoing market and geopolitical uncertainty. “Demand is driven primarily by return expectations and diversification benefits, reinforcing the role of private markets as an essential allocation in long-term portfolio construction,” the report notes.
Taken together, the findings point to an industry entering a more demanding phase where growth, resilience, and innovation must be matched with operational discipline and scalability. Private markets are no longer defined solely by access. Instead, competitive advantage is shifting toward firms that can offer agile liquidity frameworks, transparency, and performance at scale.
Venezuela is leaving behind, at least partially, one of the greatest financial isolations in Latin American history. The gradual easing of United States sanctions is no longer limited to the oil sector.
Washington and Caracas began opening spaces for financial services, debt advisory, banking operations, and certain transactions linked to PDVSA, creating the conditions for the country to attempt a return to international capital markets.
The move is particularly relevant for fixed-income investors. Venezuela and its state oil company, PDVSA, have accumulated around $60 billion in defaulted bonds, while the total amount of obligations potentially involved in the restructuring could range between $200 billion and up to $240 billion when overdue interest, bilateral loans, corporate claims, and arbitration awards are added.
Calculations by analysts consulted by international agencies indicate that bond claims alone, including past-due interest, could reach about $102 billion.
The regulatory shift began taking a concrete financial shape on May 5, when the U.S. Treasury’s Office of Foreign Assets Control (OFAC) issued General License 58, which allows certain legal, financial, and consulting services related to an eventual restructuring of Venezuelan and PDVSA debt. The license, however, did not yet authorize the payment or settlement of debt nor direct negotiations between Caracas and its creditors.
That nuance is fundamental for markets because Washington did not open the Venezuelan market all at once; rather, it began removing one of the main regulatory obstacles so that a financial resolution could be reached.
Bond Market, First to React
The reaction of Venezuelan bonds shows the extent to which investors were awaiting a normalization of the financial situation in Venezuela after years of isolation.
When the United States authorized certain operations with PDVSA in March, the Venezuelan sovereign bond maturing in 2031 rose to 50.25 cents on the dollar, while the PDVSA 2027 advanced to 35.35 cents, according to LSEG data cited by Reuters.
The movement was not a simple reflection of better oil prospects. The market began discounting the possibility of an orderly restructuring and, above all, that Venezuela could once again generate sufficient income to support some form of recovery for creditors.
By mid-July, the Venezuela 2031 bond reached trading levels around 56 cents on the dollar, although it later pulled back toward the 54–55 cent range. Market records show that the instrument was well above its levels from the beginning of the year.
The signal is clear: the market is assigning a much higher value to debt that for years was virtually a frozen asset.
The next step was Caracas’s decision to formally initiate the restructuring of its external debt and that of PDVSA.
The Venezuelan government announced a process in May that it described as “comprehensive and orderly,” aiming to reduce the burden of accumulated obligations. In parallel, it hired Centerview Partners as financial advisor to lead the process.
The decision was received positively by markets, but it also opened a much more complex debate: what is Venezuela actually worth?
The absence of updated financial information is one of the main obstacles. Reuters noted in July that Venezuela had gone years without publishing complete debt statistics and that the universe of obligations could reach $240 billion, well above previous estimates of between $150 billion and $200 billion.
The problem is not only the size of the debt, but also its composition.
Venezuela owes approximately $25 billion to bilateral creditors; about $8.69 billion corresponds to the Paris Club, and between $13 billion and $15 billion are estimated to be obligations owed to China, according to estimates cited by Reuters.
Added to this are nearly $4 billion owed to multilateral banks such as CAF and the Inter-American Development Bank, along with over $20 billion in arbitral and judicial claims.
The complexity increases due to corporate obligations: Repsol has indicated that Venezuela owes it around 4.55 billion euros, while ENI reported about $3.3 billion in overdue accounts from PDVSA as of the end of 2025.
An Opportunity for Distressed Debt Funds
For the asset management industry, the Venezuelan case could become one of the most interesting distressed debt operations of the decade.
The reason is simple: there is an enormous volume of debt trading at deep discounts, a country with the largest proven oil reserves in the world, and a geopolitical shift that is progressively reducing entry barriers to the financial system.
However, an exceptional set of risks also exists: the true magnitude of the debt, the quality of financial information, legal uncertainty, creditor claims, the status of Citgo, PDVSA’s production capacity, and the possibility that the restructuring process will drag on. In other words, Venezuela is becoming investable again before becoming normal again.
That nuance may be the key for specialized managers. The opportunity lies not necessarily in buying Venezuelan debt as if it were traditional emerging market debt, but in evaluating recovery scenarios, creditor hierarchy, collateral, underlying assets, and the probability of normalization.
Private banking is also watching the return with interest, and the financial reopening is starting to alter the positioning of Venezuelan banking as well.
Private entities such as Banesco and Banco Nacional de Crédito continue operating in the local foreign exchange market and publishing financial information during 2026, while the banking system adapts to an environment of greater foreign currency usage and an eventual normalization of international financial relations.
In this sense, there is evidence that international banking is laying the groundwork: JPMorgan and Jefferies evaluated visits to Caracas amid growing investor interest in the economic recovery and debt restructuring, although both banks declined to comment publicly on their plans.
However, it seems the story still has several chapters left to unfold—at least that is also what some relevant global actors are saying.
The True Return Will Come When the Primary Market Returns
The biggest change for Venezuela will not be that its existing bonds rise in price. It will be that the country can issue new debt again under normal conditions, and it appears that moment is still far off.
The removal of secondary sanctions or the authorization of operations on existing debt can improve liquidity and the pricing of old instruments, but a full return to the primary market requires much more, including factors such as: reliable statistics, audits, a credible macroeconomic framework, a restructuring accepted by creditors, legal recognition of obligations, and a demonstrable capacity to pay.
The resumption of relations with the IMF and the World Bank constitutes another relevant component. Both institutions resumed relations with Caracas in April after several years of interruption, opening the door for technical assistance and eventually the use of approximately $5 billion in Special Drawing Rights (SDRs) that Venezuela holds unutilized.
IMF Managing Director Kristalina Georgieva warned, however, that Venezuela still faces a “very difficult road” to recover macroeconomic and financial stability.
U.S. regulatory development reflects precisely this gradual nature.
OFAC maintains numerous restrictions on Venezuela and its state entities. Even after the new licenses, not all debt, equity, PDVSA asset, or sanctioned entity operations are authorized.
A particularly important example is the PDVSA 2020 bond with an 8.5% coupon, backed by an equity stake in Citgo. OFAC has issued specific licenses for certain operations related to this instrument, showing that Washington is advancing through specific exceptions and permits rather than an immediate, general elimination of the sanctions regime.
That mechanism has a direct consequence for investors: regulatory risk remains priced in.
For this reason, even though Venezuelan bonds have left their lows behind, they cannot yet be treated as conventional emerging market debt.
Oil Is the Key to Capital Markets
Venezuela’s recovery largely depends on its ability to convert its massive oil reserves into cash flow.
Reuters reported in July that oil companies and refiners are resuming direct deals with PDVSA as sanctions ease. Phillips 66, Valero, Reliance Industries, and Tipco Asphalt are among the companies that have resumed or prepared direct purchases of Venezuelan crude, while Chevron, Repsol, and Eni expand operations linked to Venezuela.
Currently, Venezuelan oil production stands at around 1.2 million barrels per day, according to Reuters, with expectations of reaching 1.37 million toward the end of 2026.
For debt markets, that evolution is crucial. Higher production means more external revenue, greater fiscal capacity, and, potentially, a source of resources to sustain a restructuring.
Yet a risk remains: that markets discount an oil recovery too quickly when it actually requires investment, infrastructure, technology, and legal stability.
Stepping Out of the System’s “Shadows”
Venezuela’s own monetary authority has described the shift as an opportunity to return to the international financial system.
Luis Pérez, interim president of the Central Bank of Venezuela, told Reuters in May that restructuring the Republic and PDVSA’s debt would allow the country to be brought “out of the shadows” of the global financial system.
Pérez also maintained that the United States plays a central role in lifting restrictions and highlighted the rapprochement between the Venezuelan central bank and the U.S. Treasury. Washington had previously authorized the Central Bank of Venezuela to conduct certain operations with foreign entities.
The statement is significant because it reflects the shift in perception within Caracas: lifting sanctions is no longer seen solely as a diplomatic or oil matter, but as the necessary condition for rebuilding financial channels that allow for debt refinancing, attracting investment, and eventually returning to the international capital market.
Perhaps the most important shift is that Venezuela is ceasing to be exclusively a geopolitical problem and becoming an investment thesis once again.
The gradual lifting of sanctions has reactivated bond prices, put PDVSA back on the radar of international investors, and set off a race among banks, distressed funds, financial advisors, and creditors to determine how much can be recovered from a debt load that could top $200 billion.
However, the market is also sending a message: the first stage of normalization may yield huge profits for those who bought debt at crisis prices, but the second—rebuilding a functional Venezuelan capital market—will require something far more difficult than an OFAC license. It will require trust, and the price of that trust cannot be measured entirely in monetary terms.
That trust must be built through financial transparency, predictable legal rules, sustainable oil production, and a debt restructuring that creditors consider credible.
For now, Washington has opened the door and investors are already entering the foyer; but Venezuela’s true return to Wall Street still depends on Caracas demonstrating that it can once again become an issuer, not just a distressed asset.
Amid the geopolitical uncertainty and marked volatility that characterized the first half of 2026, financial advisors in Latin America and US Offshore made strategic decisions to rebalance their portfolios, according to findings from the latest Advisory Portfolio Barometer by Natixis Investment Managers. The report, which analyzes 53 moderate model portfolios, highlights that the strongest portfolios did not simply take on excessive risk, but rather managed and applied risk more effectively.
The most notable finding was the reaffirmation of the traditional investment core: traditional assets (equities and fixed income combined) remained the preferred option, representing 89% of the average portfolio. The report also revealed a reconfiguration of how advisors manage risk. Facing a scenario where conventional defensive formulas lost effectiveness, professionals chose to dynamically adjust their strategic weightings, seeking a balance between capturing growth and protecting capital through more agile vehicles.
Flexibility in Bonds and Greater Weight Assigned to Equities
To navigate an environment in which equities and bonds moved in the same direction, reducing the protection traditionally offered by fixed income, advisors turned decisively toward flexibility. Diversified and flexible strategies reached 60% of the average fixed-income allocation, and purely flexible fixed-income mandates alone represented 40% of this asset class. This flexibility gave managers the necessary leeway to actively adjust duration and credit risk.
Alongside this search for flexibility, the second major decision made by advisors was to increase equity exposure to 47% of the total portfolio, an increase of 4 percentage points compared to the first half of 2025. To fund this higher equity allocation and make room for real assets, professionals moderately reduced their position in traditional fixed income, which settled at 42% of the total portfolio.
This is affirmed by Lucas Pérez, Country Head for the Southern Cone at Natixis Investment Managers: “This study confirms what we have been observing in the market: the advisors who navigated the first half of 2026 best were not those who took on the most risk, but those who managed it more intelligently. Flexible fixed income gave them maneuvering room amid rate shifts, and the increase in equities and real assets reflects a more accurate reading of the economic cycle. The challenge now is that, with the correlation between equities and bonds at historically high levels, diversification can no longer rely solely on traditional instruments, and that applies to our clients across the region as well.”
Concentration Management and Tactical Diversification
The Natixis IM barometer showed that portfolio execution and internal structure were the factors that drove performance differences among advisors. One of the most decisive tactical choices among top-quartile portfolios (the best performers, with a half-year return of 9%) was rigorous risk management through strict control of concentration risk. Leading portfolios capped the weight of their top three positions at 40% of total assets, in sharp contrast to bottom-quartile portfolios, which kept a high 53% of their capital exposed to just three instruments, leaving them more vulnerable to market volatility.
This drive for lower concentration was also reflected strategically within the equity component. While top-performing portfolios diversified their exposure across a median of seven positions and capped their largest single holding at 32% of the equity component, the lower-performing group concentrated a high 45% in a single position while holding an average of only four assets in total. This lack of diversification prevented lagging portfolios from participating evenly in the market recovery during the second quarter of the year.
The barometer also revealed a clear shift in credit approach. Top-performing advisors opted to reduce traditional global fixed income to 35.9% of their bond allocation (compared to 49% in the bottom quartile). Instead, they rotated that capital into more targeted niches that offered a better risk-adjusted return profile, tactically increasing their exposure to corporate debt, emerging market paper, and short-duration strategies.
Finally, the last high-impact decision distinguishing the most resilient portfolios was the incorporation of uncorrelated hedges. Nearly half of the top-quartile portfolios incorporated alternative and real assets (such as commodities and real estate), compared to less than a third of bottom-quartile portfolios doing so. This tactical inclusion allowed leading advisors to generate a 23% diversification benefit (versus 15% for lagging portfolios), successfully offsetting the historically positive correlation between equities and bonds that affected the industry during the first half of the year.
Photo courtesyFederico Muxi, Managing Director & Senior Partner de BCG
In a context where the private wealth management industry is growing at double digits, Latin America stands out. The region is seeing a particularly strong expansion rate according to Boston Consulting Group (BCG), driven by the appreciation of regional currencies and a variety of business-related factors—a momentum that currently shows forward projections.
“Latin America stood out for its growth,” emphasizes Federico Muxi, Managing Director & Senior Partner at the consulting firm, in an interview with Funds Society. As part of the firm’s Global Wealth Report, they estimated that the region saw a growth of 17.7% in 2025, measured in dollars. In contrast, the global industry grew by 10.7% during that same period.
What explains this? On one hand, there is the currency dynamic. “A good portion of this growth—roughly half—occurred because many of the main Latin American currencies appreciated against the dollar last year,” indicates the executive, who leads BCG’s financial institutions practice in Iberia and South America. This is the case, he explains, for the currencies of several major regional economies, including the Brazilian real, the Mexican peso, the Chilean peso, the Colombian peso, and the Peruvian sol.
The other half of last year’s boom comes from the dynamism of the economies, the savings rate they generate, and the evolution of local capital markets. “If you look at market performance over the last year, it was very good. And this year it is being replicated as well,” notes the executive, citing strong gains in stock markets that appreciate wealth.
“Despite geopolitical uncertainty and rising inflation in some markets, exacerbated by the increase in oil prices, the markets have still not adjusted and continue to show very good yields,” he adds.
A More Sophisticated Local Offering
Muxi highlights Brazil and Mexico as the hubs of greatest growth in terms of absolute volume. Regarding sophistication—including variables such as industry competitiveness and investment firm capabilities—he highlights Brazil and Chile.
Along those lines, Muxi attributes these dynamics to an economic context favorable to the business. “These are economies that have been very stable for quite some time, with good returns on local currency investments—especially in Brazil—and when that happens, a virtuous cycle is created,” he explains.
In a context where the trend is moving toward offshore investments—a trend established in the industry globally—these characteristics favor the local development of the business. Macroeconomic stability and legal certainty bring more local investments compared to offshore hubs, comments the BCG executive, which incentivizes the development of a more competitive local advisory offering. At the same time, this sophistication brings more onshore investments.
To illustrate, Muxi points out that the percentage of total financial wealth—including pension funds—held offshore reaches only 9% in Chile and 11% in Brazil. In contrast, that figure reaches 70% in cases like Argentina.
An Expanding Investor Base
Another trend that has favored the boom in the region’s wealth management business, according to the consulting firm, is the greater variety of wealth the industry is capturing. Aligning with a global trend, BCG has seen many players targeting sectors that have traditionally been underserved by major international financial advisory firms.
“Global banks, which have high compliance costs and Know Your Customer requirements, have typically pulled back in recent years to focus on the Ultra High Net Worth segment of 5 million dollars and above,” Muxi explains. This focus leaves wealth between 500,000 and 1 million dollars seeking services elsewhere.
This presents an opportunity for onshore segment players, who tend to be closer to these clients and can generally better leverage commercial banking—often as part of the same financial groups—as well as for new players, such as B2B2C platforms that channel independent wealth managers. “That is a super relevant phenomenon in the region and one of growing size,” Muxi indicates.
Looking ahead, this phenomenon is expected to keep driving the industry forward, he notes, albeit with questions around the impact of artificial intelligence and how various local players will adopt the technology.
Good Prospects for the Region
Moving forward, BCG sees a favorable context for the industry to continue developing in Latin America. “This is an industry that is always exposed to macroeconomic growth, savings rates, and how markets evolve,” Muxi emphasizes. Therefore, if markets continue to perform as they have in recent years, high growth in the industry will persist.
“In general, we are positive about the growth of wealth,” notes the professional. The firm is projecting a compound annual growth rate (CAGR) of between 7% and 10% for various countries in the region over the next five years. This spectrum places Chile at the higher end of the expansion range and Colombia closer to the bottom. “But with good prospects overall for the region,” he stresses.
In any case, this future dynamic will depend on factors such as macroeconomic stability and legal certainty in each country, which favor wealth management development and onshore investments.
In that regard, a potential challenge facing the industry relates to financial markets. Considering the heavy bet investors are making on artificial intelligence, an adjustment in international markets—as posited by those who see an AI bubble—would impact the industry. “It is a super relevant factor,” in Muxi’s words.
The Margin Challenge
On the structural side, another challenging aspect is the trend of narrowing margins in the private wealth business. “Margins have historically compressed because we are moving, like all businesses, toward a world with greater transparency,” which translates to clients being more conscious of fees, he explains. Additionally, various countries have introduced regulations regarding industry compensation.
“Fees, and thus industry revenues, fall gradually over time,” notes the BCG executive, while on the other side, costs remain relatively stable.
The general trend in the industry is for firms to cut front-office costs through technology and efficiency efforts. However, this is offset by rising back-office costs, which include investments in technology and compliance.
“The end result is slightly declining revenue and relatively stable costs,” Muxi highlights, leading to a slight compression of margins.
Even so, he emphasizes that it remains a profitable business with a model that generates revenue without deploying capital, and with low credit risk. “This is a business that, even with slightly compressed margins, remains super attractive for all players,” he stresses.
Photo courtesyMabrouk Chetouane, Global Head of Market Strategy at Natixis IM Solutions.
Mabrouk Chetouane, Global Head of Market Strategy at Natixis IM Solutions, believes that the cyclical decoupling observed during the first half of the year between the United States and the eurozone will likely continue for the remainder of the year. Specifically, the expert expects U.S. GDP growth to hover around its potential rate (2.4%), while eurozone growth will struggle to exceed an annual average of 0.7%.
In his view, the pressure exerted by the exogenous supply shock associated with the Middle East conflict on energy prices continues to weigh on the European economy and business activity. Without a doubt, the big question is what we can expect between now and December. We asked Chetouane about this in our latest interview at Funds Society.
What factors do you think will drive the markets during the second half of the year?
We identify three key factors that will mark the evolution of financial markets in the second half of the year. First, geopolitical factors will continue to cloud the outlook for risk assets. Although investors have largely grown accustomed to an environment characterized by the proliferation of conflicts, any escalation will translate into a new surge in market volatility.
Second, monetary factors will play a decisive role in shaping monetary and financial conditions and, consequently, the performance of equity markets. Finally, corporate earnings growth will be the determining variable in whether stock markets can continue to advance.
How will these factors influence the positioning of investment portfolios?
Logically, a resurgence of hostilities would cause renewed tension in energy markets, bond yields, and currency markets, although it would not necessarily trigger a significant correction in financial markets. Conversely, an easing of tensions in the Middle East—coupled with the absence of new conflict flashpoints globally—would present a favorable scenario for capital markets.
The monetary factor is probably the most unpredictable. Central banks have abandoned forward guidance, leaving greater room for monetary policy surprises. This new environment could increase capital market volatility and significantly raise the cost of capital.
How do you think portfolios should be adjusted for the rest of the year?
We believe that upward pressure on bond yields will persist during the second half. In this context, it is appropriate to reduce portfolio duration by increasing allocations to liquidity or high-yield corporate debt. Although equities—especially the technology sector—will continue to experience episodes of volatility and short-term rallies, we believe stock markets will remain supported by solid corporate earnings growth. Therefore, we maintain an overweight position in equities, particularly in markets driven by growth companies.
What factor do you consider the market is overlooking that, in your opinion, will be relevant?
Generally speaking, the market is aware of the main risks that could impact its functioning. However, at present, it is ignoring the domestic political factor in the United States. The approach of the midterm elections could become a major source of division within American society and ultimately disrupt the behavior of financial markets.
What can we expect from Warsh’s Fed, and what implications will it have for investors?
The arrival of the Federal Reserve’s new leadership marks a clear break from the approach adopted in recent years. By abandoning forward guidance, Kevin Warsh favors a more discretionary strategy regarding monetary policy, which may generate greater uncertainty among investors regarding the institution’s future decisions. The reduced visibility stemming from this new governance model will, de facto, translate into increased uncertainty, which is expected to trigger greater volatility in capital markets and a higher risk premium, particularly in sovereign bonds.
Global asset managers face growing pressure to transform their business models or risk falling behind in a sector where client expectations are being profoundly redefined. This is the warning from the study “An Expanding Mandate: A Systems Level Framework for Asset Management,” jointly produced by WTW’s Thinking Ahead Institute (TAI) and the CAIA Association. The report argues that traditional approaches, focused exclusively on returns relative to a benchmark index, are losing relevance in an environment increasingly shaped by interconnected risks, structural shifts, and rising client demands.
The research highlights a widening gap between firms adapting to this new reality and those continuing to operate under legacy frameworks. The report calls this new approach “systems-level investing,” a model that recognizes that long-term investment outcomes depend on the health and resilience of the broader economic, social, and environmental systems in which markets operate.
While firms generally acknowledge the importance of major structural themes such as geopolitics, artificial intelligence, or the convergence between public and private markets, the research indicates that many are not yet able to respond to them in an integrated manner—a capability that will be decisive for future success.
In contrast, some large asset owners—including sovereign wealth funds and pension plans—are adopting increasingly integrated approaches, with a greater emphasis on real-world outcomes and long-term resilience, and they expect the same from the asset managers they appoint.
The study also reveals that, despite intense industry rhetoric surrounding artificial intelligence, asset managers are not investing in AI at the pace public perception suggests. Five-year projections show that firms intend to keep human capital investment at the forefront, while technology spending increases only marginally. This finding underscores the need to balance the push for AI with other priorities such as talent, governance, and decision-making.
A Return to the Traditional Model
In this landscape, the portfolio management sector is undergoing strategic repositioning and accelerated consolidation. Although these trends stem from multiple factors, firms slower to evolve their capabilities and business models could find themselves more exposed to these pressures as client expectations continue to shift.
Therefore, the Thinking Ahead Institute and CAIA Association urge leaders in the asset management industry to rethink how success is defined within their organizations, strengthen their ability to make decisions in a more interconnected environment, and develop the talent and cultures necessary to operate effectively in a more complex world.
“Asset management is running out of room to maneuver with traditional approaches. In a world defined by interconnected risks, structural changes, and growing client demand, benchmark-only thinking is no longer enough. Firms need to adopt a more integrated, systemic view to remain relevant,” notes Marisa Hall, Director of the Thinking Ahead Institute.
In the view of Brenda Szymanowski, Investments Director at WTW Spain, many asset managers remain attached to models built for a simpler context. “The reality, uncomfortable as it may be, is that relevance is already being quietly but decisively redistributed by asset owners toward those who have transformed their organizations for this new reality,” she comments.
Finally, for John Bowman, CEO of CAIA, the era of training in technical skills within investment management has definitively given way to lateral and cross-disciplinary thinking. “Geopolitical fragmentation, technological disruption, demographic shifts, and the growing convergence between public and private markets demand a broader view, capable of connecting dots across different disciplines. This report highlights why systems thinking is becoming a strategic necessity for investment organizations seeking to stay relevant, resilient, and aligned with the evolving needs of asset owners,” he maintains.
Goldman Sachs Group announced this week the acquisition of Neos Investments for up to $2.25 billion. The transaction will be completed through a combination of cash and stock, according to a press release.
Founded in 2022, Neos manages nearly 20 option-based ETFs, totaling approximately $32 billion in assets. The products utilize strategies oriented toward income generation and dividend distribution.
The transaction also involves a company with a presence in the Brazilian market. Buena Vista Capital maintains a strategic alliance with Neos in the United States and uses indices and methodologies developed by the firm to structure ETFs in Brazil. The products combine exposure to global assets, such as bitcoin, ethereum, the S&P 500, and U.S. Treasury bonds, with option-writing strategies to generate income and distribute monthly dividends.
For Renato Nobile, CEO and CIO of Buena Vista Capital, the acquisition reinforces the asset manager’s partnership with Neos. “The acquisition by one of the world’s largest financial institutions expands the visibility of the methodologies used by the firm and helps validate the ETF model that combines exposure to different asset classes with option strategies for income generation,” he stated in the press release.
With the acquisition, Goldman Sachs’ ETF assets are expected to reach approximately $130 billion. Neos co-founders, Troy Cates and Garrett Paolella, will join Goldman Sachs Asset Management as partners, while the Neos team is expected to remain with the company.
According to the statement, the deal occurs against a backdrop of expansion in actively managed ETFs and income-generating strategies in the U.S. market. These strategies also apply in Brazil through products structured with Neos methodologies.
Buena Vista Capital was founded in 2021 and operates across fixed income, equities, digital assets, and venture capital. In Brazil, the asset manager introduced ETFs with covered call strategies and monthly dividend distributions, including SPYI11, QQQI11, and COIN11.
The United States has replaced temporary tariffs with new duties ranging between 10% and 12.5% targeting 60 countries, which account for 99% of its goods imports. Far from signaling a relaxation of tariff policy, this move highlights Washington’s determination to maintain strong trade protection while preparing new measures, as highlighted by Coface economists.
Washington Maintains Tariff Pressure
According to Coface, the expiration of temporary tariffs established under Section 122 does not represent a retreat in U.S. trade policy. These tariffs expired on July 24, but they have been replaced by new duties ranging from 10% to 12.5%, based on Section 301, applicable to 60 countries representing 99% of U.S. goods imports. This transition highlights Washington’s determination to maintain a high level of tariff protection despite legal hurdles encountered in recent months.
“The immediate impact on the average level of customs duties is expected to be limited: the new measures do not automatically add to already existing tariffs and do not significantly alter the average rate applied to U.S. imports. Nevertheless, they demonstrate the U.S. administration’s ability to adapt its instruments and continue advancing its trade strategy,” Coface analysts add.
A Stronger Legal Basis
Section 301 has already been used by the United States to impose tariffs, notably against China during the first Trump administration. Unlike the framework based on IEEPA, whose solidness was questioned due to the lack of explicit authorization to impose tariffs, Section 301 provides the White House with a stronger and more clearly established legal basis.
However, this increased legal foundation does not rule out the possibility of future challenges. To justify these duties, Washington argues that affected countries lack effective mechanisms to prohibit or control imports resulting from forced labor. Importing companies could challenge this rationale, particularly given that it applies to a very broad group of trading partners.
“This decision is not simply a technical renewal of existing tariffs. Above all, it demonstrates Washington’s intention to convert a contested regime into a more sustainable tariff framework. For businesses, the message is clear: the risk of U.S. tariffs remains high, even when a measure is on the verge of expiring,” explains Marcos Carias, North America economist at Coface.
New Tariffs on the Horizon
The new tariffs between 10% and 12.5% restore a common tariff framework for a large portion of U.S. imports, but they do not fully restore the previous regime. That regime also included additional surcharges targeting specific countries or products. It is precisely this second layer of measures that Washington could seek to reinstate in the coming months.
A new investigation under Section 301 is already underway, focusing this time on the structural overcapacity of 16 economies, including China, the European Union, Japan, South Korea, Taiwan, India, Vietnam, Mexico, and several Southeast Asian countries. While both the timeline and tariff levels that could result from this probe remain unknown, this procedure could allow Washington to target its measures more specifically against certain economies.
Other sector-specific investigations are also being conducted, particularly in aerospace, drones, medical equipment, robotics, industrial machinery, wind turbines, critical minerals, and polysilicon. Here again, it is not possible to predict with precision what measures might be adopted, but these investigations confirm that U.S. tariff policy remains in full evolution.
Canada: An Example of Escalating Trade Pressure
The pressure being exerted on Canada illustrates this dynamic. The United States has announced new 50% tariffs on Canadian imports valued at $20 billion—equivalent to 5.2% of Canadian exports to the U.S.—set to take effect on August 19, 2026.
At first glance, this measure appears designed as a leverage tool in North American trade talks. Its macroeconomic impact would remain limited should it come into force, but it confirms the increasingly frequent use of tariffs as an instrument of economic and diplomatic pressure.
Digital assets are entering a “mature institutional phase,” with sector development reflecting the growth of private markets, according to a new report by Nickel Digital Asset Management (Nickel). Based on a global survey of institutional investors and wealth managers together managing over $14 trillion in assets, the report reveals that 91% plan to increase their digital asset holdings over the coming year.
Furthermore, 65% place digital assets among their top five asset classes for risk-adjusted returns over the next five years. This figure surpasses the 61% who opted for private equity and the 53% who selected European equities and commodities in the report titled *The Next Stage of the Digital Assets Investment Revolution*.
Market Evolution and Asset Allocation
Nickel believes the study—conducted across the U.S., U.K., Germany, Switzerland, Singapore, Brazil, and the United Arab Emirates—demonstrates that the evolution of digital assets mirrors the development of private markets as a whole. Looking at the alternative asset class data, 58% of institutional investors and wealth managers view digital assets as part of their allocation to alternative asset classes. Meanwhile, data for the standalone sector indicates that the remaining 42% classify them as a standalone sector.
The research for the report also revealed that pension funds and wealth managers are among the investor profiles likely to lead the adoption of digital assets over the next two years. Around 69% of professional investors surveyed believe that pension fund investment will increase dramatically, while 60% hold the same view regarding wealth managers. The Nickel report also examines a wide range of other topics, such as digital asset corporate treasuries, crypto IPOs, ETF launches, tokenization, and the appeal of careers in the crypto sector.
“We conduct regular research across the sector, and it is clear that institutional investors are no longer debating whether digital assets should be part of their portfolios, but rather how to access them in a controlled manner with proper risk management. For this adoption to continue, stronger regulation and greater transparency will be required to alleviate lingering concerns around operational risk and market integrity. Nevertheless, digital assets are advancing into a more mature institutional phase, where growth will be driven less by speculative flows and more by disciplined strategic allocations,” notes Anatoly Crachilov, CEO and founding partner of Nickel Digital.
