Due in large part to a growing demand for advisory services driven by the proliferation of sophisticated financial products, the U.S. wealth management industry is experiencing a period of strength and stability. However, threats are on the horizon: the sector could face a shortage of approximately 100,000 advisors by 2034, according to a report by McKinsey & Co.
In its report, the strategic consulting firm suggested that it is necessary to “change the operational model of advisors to increase productivity (through lead generation, teamwork, and an AI- and technology-enabled shift toward value-added activities) and attract new talent to the industry much faster than before.”
The study also warned that, in the long term, hiring veteran advisors is not a solution: there will be around 110,000 advisor retirements, leading to a decline in the total number of advisors by about 0.2% annually over the next decade.
This shortage is approximately—according to the global consulting firm—30% of the 370,000 advisors estimated to be needed in 2034 to meet the growing demand for wealth management in the United States.
Additionally, about 27,000 advisors switch firms or go independent each year, according to the study. The decline in supply and the emergence of private equity investments in advisory firms have already driven up hiring costs, the report added. The study was authored by Jill Zucker, Jimmy Zhao, John Euart, Jonathan Godsall, and Vlad Golyk, representing the views of McKinsey’s Financial Services Practice.
The report breaks down and analyzes the increasing demand for advisory services, driven by the rise in U.S. household wealth and the growing demand and willingness to pay for human advice. It also compares this with the decline in the number of advisors.
“The advisor workforce has grown by only 0.3% annually over the past ten years (…) The number of advisors is expected to decline by around 0.2% annually. Retirements outpace hiring, as advisors are, on average, ten years older than members of similar professions. An estimated 110,000 advisors (38% of the current total), who represent 42% of the industry’s total assets, will retire in the next decade,” the report noted.
The report’s authors believe that if this fundamental supply bottleneck is not resolved, the industry will continue to face a zero-sum competition for advisor talent. “While hiring experienced advisors is crucial to the success of many firms, the industry should also adopt a long-term perspective and develop sustainable strategies to attract more advisors to the sector, help them grow faster, and enable established advisors to be more productive,” they stated.
Catastrophe bonds, whose returns have consistently outperformed high-yield debt markets in recent years, are about to become accessible to a broader segment of investors.
Next month, the Brookmont Catastrophic Bond ETF, based on a portfolio of up to 75 of the 250 so-called “catastrophe bonds” in circulation, could begin trading on the New York Stock Exchange (NYSE)—a global first.
“It’s an asset with a lot of nuances, and our goal is to demystify it,” said Rick Pagnani, co-founder and CEO of King Ridge Capital Advisors Inc, which will manage the ETF, in an interview cited by Bloomberg. The fund will be overseen by Brookmont Capital Management LLC, based in Texas.
Pagnani, who until last year led Pimco’s insurance-linked securities division, stated that “it is difficult to create a diversified catastrophe bond portfolio for a typical individual investor.” By packaging catastrophe bonds into an ETF, “we aim to lower some of the barriers to entry,” he said.
The market, dominated by U.S. issuances, is currently valued at approximately $50 billion, according to Bloomberg.
According to Pagnani, the pipeline of projects remains “strong and growing,” which could help push the market to $80 billion by the end of the decade.
Brookmont and King Ridge are still finalizing the lineup of partners involved in launching the ETF. They aim to raise between $10 million and $25 million in initial capital. The ETF is registered with the SEC.
The fund will cover risks ranging from Florida hurricanes and California earthquakes to Japanese typhoons and European storms, according to the prospectus filed with the U.S. market regulator.
As outlined in the prospectus, it is an actively managed ETF that, under normal circumstances, will invest at least 80% of its net assets in catastrophe bonds. It will not have restrictions on specific issuances, risks, or geographic exposure. However, the document notes that at times, the fund may have a relatively higher exposure to U.S.-related risks.
Additionally, it may occasionally have a greater concentration in Florida hurricane-related catastrophe bonds than in other regions or risks due to the higher availability of such investments relative to the global market.
Vanguard became the world’s largest ETF at the start of this week, marking a milestone in an industry valued at $11 trillion, according to a statement from the firm.
According to figures from the asset manager, financial agencies, and the market, Vanguard’s S&P 500 ETF (NASDAQ: VOO) now manages nearly $632 billion in assets, after recording approximately $23 billion in inflows so far this year.
The increase in inflows pushed VOO above the SPDR S&P 500 ETF Trust—commonly known in the market as SPY—which lost its title as the world’s largest ETF, now managing around $630 billion in assets.
Nonetheless, the competition between the two funds remains very close. While SPY is no longer the largest ETF in terms of assets, it remains highly valued by asset management professionals for its ease of trading and low costs, features that allow fund managers to enter and exit the market quickly.
SPY was launched in 1993 by the U.S. stock exchange and State Street Global Advisors, making it one of the longest-running ETFs still in operation today. This fund has long benefited from a significant first-mover advantage in terms of size and trading volume. Now, with its rapid growth, Vanguard has surpassed SPY, marking a new chapter in the global ETF industry.
The scale of operations in both funds is enormous, although SPY continues to set the standard in this segment. According to Bloomberg data, over the past twelve months, SPY has averaged daily trading volumes of $29 billion—the highest for any ETF. In contrast, Vanguard’s VOO averaged $2.8 billion in daily trades.
Vanguard’s alternative emerged in 2010 and immediately experienced rapid growth, thanks to the firm’s reputation and loyal following among investors. This includes financial advisors looking to boost their commissions. Over the past twelve months, VOO has attracted more than $116 billion, setting a record for annual inflows.
The appeal of the index-based fund highlights the profile of Vanguard’s core clients, such as cost-conscious financial advisors and retail investors with a long-term investment focus.
The “buy-and-hold” strategy has been a key differentiator between the two ETF giants. While VOO investors favor this approach, SPY is valued by professional traders for its high liquidity and narrow spreads. However, its higher trading volume often results in significant flows in both directions (inflows and outflows).
Analysts highlight a key fact: VOO has never experienced an annual net outflow since its launch in 2010, whereas SPY has recorded net withdrawals in five years over the same period.
Last year, Mexico received another record amount of remittances from its workers abroad, primarily in the United States. Official figures indicate that remittance income totaled an unprecedented $64.75 billion. However, due to changes in U.S. immigration policy, the outlook could shift.
As an indication of the importance of remittances for Mexico and its top recipient states, the Latin American country solidified its position in 2024 as the world’s second-largest recipient of remittances, surpassing China (which received $48 billion). Only India ranked higher, reporting inflows of $129 billion.
The significance of remittances in Mexico is already reflected in key indicators. For example, their share of GDP increased from 2.0% to 3.6%. Additionally, they now account for 5.2% of private consumption, compared to 2.8% in 2010.
“Without a doubt, remittances serve as an important supplement to household income. When compared to total wages (as estimated by the National Occupation and Employment Survey, ENOE), the proportion stands at 16% (2023),” noted the Banamex research team.
Seven States at Risk
Although all states in Mexico receive remittances, seven states are particularly dependent on these flows. In some cases, remittances have become essential to state economies, with entire communities relying almost entirely on them.
In 2024, seven states accounted for more than half of the total remittance inflows. Michoacán, Guanajuato, and Jalisco each received around $5.5 billion, representing 8.7% of the national total for the first two states and 8.5% for the third. Combined, these three states accounted for 25.9% of the country’s total remittances.
These states, which have historically seen high levels of migration, have consistently led in remittance inflows since data collection by state began in 2003. Mexico City, the State of Mexico, Chiapas, and Oaxaca complete the list of the seven states that received over half of the country’s remittances, with 7.2%, 7.1%, 6.4%, and 5.3%, respectively, for a total share of 52%.
Over the past decade, Mexico City and Chiapas have significantly increased their share, rising from 5.4% and 2.9% in 2003, respectively. Meanwhile, Michoacán has seen a decline in its share, dropping from 12.4% in 2004.
According to Banamex, in some states, remittances account for more than 10% of GDP. The inflow of these funds has reached levels similar to those of Central American countries that are highly dependent on remittances.
For instance, in 2023, remittances to Mexico represented more than 20% of GDP in Guatemala, El Salvador, Honduras, and Nicaragua. Meanwhile, in Chiapas, the share reached 16%. In three other states—Guerrero, Michoacán, and Zacatecas—remittances accounted for 13.8%, 10.9%, and 10.6%, respectively.
Moreover, in some Mexican states, remittances play an even more crucial role due to socioeconomic conditions. In Chiapas, Guerrero, and Zacatecas, remittances represent 52.7%, 50.8%, and 47.7% of total payroll income, respectively.
As a result, the income generated abroad by workers from these states or with ties to them is equivalent to half of what the entire employed population produces in those regions. When combining salaries with remittance income, one in every three pesos in household income in these states originates from abroad. These states are among the most economically disadvantaged in Mexico, with high levels of informal employment (74.6%, 78.3%, and 60.6% of the Economically Active Population).
The Trump Factor
The return of Donald Trump to the U.S. presidency and his policies against foreign workers, particularly undocumented immigrants, could alter the conditions and flow of remittances to Mexican states that rely on them.
Banamex warns: “Trump’s return to the White House and the immigration policies implemented in the early days of his administration, along with a projected weakening of the U.S. labor market—including for workers of Mexican origin and Mexican-born individuals—suggest a potential decline in remittance flows. This could limit migration and further discourage the hiring of undocumented workers.”
“In addition, we anticipate increased volatility in these flows over the coming months, partly due to growing fears of deportation among migrants, which could reduce work hours and encourage temporary savings for survival. For 2025, we estimate a 2% increase in nominal U.S. dollars, reaching $66 billion, though risks remain tilted to the downside,” stated the Mexican bank.
One potential mitigating factor for those dependent on remittances in Mexico is a possible currency depreciation. However, nothing is certain, and remittance flows remain another likely casualty of Trump’s return to the White House
Milliman has released its 2024 year-end Multiemployer Pension Funding Study, analyzing the funded status of U.S. multiemployer defined benefit plans.
“Strong returns during the first and third quarters of 2024 largely drove the year’s significant rise in the aggregate funded percentage, which reached the second-highest point since Milliman launched this study in 2007,” said Tim Connor, MPFS co-author.
By December 31, 2024, the aggregate funded percentage of multiemployer plans increased by 97%, up from 89% in 2023 – the second-highest level since the study began in 2007. This improvement is driven by strong investment performance, estimated at 10%, and nearly $70 billion in Special Financial Assistance provided under the American Rescue Plan Act. Of this total, $16 billion was distributed in 2024 alone. Without SFA, the funded percentage would have remained at 89%.
Among the 1,193 plans analyzed, 53% are fully funded, while 84% have reached at least 80% funding. However, 7% remain below 60% and may face insolvency. Many of these plans are expected to apply for SFA in 2025.
“We now see more than half of all plans funded 100% or better as they continue their trend of upward improvement in funded percentage,” added Connor.
CEO confidence surged in the first quarter of 2025, reaching its highest level in three years. The Conference Board Measure of CEO Confidence, in collaboration with The Business Council, increased by 9 points to 60, a shift from the cautious optimism seen throughout 2024. For the first time since early 2022, the measure exceeded 50, signaling a positive outlook among CEOs. A total of 134 CEOs participated in the survey, which was conducted from January 27 to February 10.
“All components of the Measure improved, as CEOs were substantially more optimistic about current economic conditions as well as about future economic conditions – both overall and their own industries,” said Stephanie Guichard, Senior Economist, Global Indicators, The Conference Board.
Regarding employment, 73% of CEOs indicated they planned to maintain or grow their workforce over the next 12 months, unchanged from the previous quarter. However, the share of CEOs expecting to expand their workforce fell to 32%, down from 40% in Q4, while 41% planned to keep their workforce steady, up from 34%. Additionally, 27% of CEOs anticipated reducing their workforce, a slight increase from the previous quarter.
“Compared to Q4 2024, fewer CEOs ranked cyber threats, regulatory uncertainty, financial and economic risks, and supply chain disruptions as high-impact risks,” said Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Chair Emeritus of The Conference Board.
On the wage front, 71% of CEOs plan to raise salaries by 3% or more, up from 63% last quarter. Of those, 60% expect to increase wages by 3.0 – 3.9%, up from 48%. Work arrangements continued to evolve, with the most common model being 3-4 days in the office. The share of CEOs planning to shift away from remote work toward in-office schedules in the next 12-18 months has increased.
CEOs’ assessment of general economic conditions was significantly more positive in Q1 2025. 44% of CEOs reported that economic conditions were better than six months ago, up from just 20% in Q4. Only 11% said conditions were worse, a sharp drop from 30% last quarter. The outlook for their industries was also improved with 37% reporting better conditions, up from 21%.
The increase in CEO confidence was also reflected in capital spending. While 54% of CEOs indicated no changes to their plans, 33% in Q4. Similarly, 52% expect conditions in their own industries to improve, up from 31%.
The first quarter of 2025 marks a significant shift in CEO sentiment, with widespread optimism about the economy, industries, and future growth prospects.
Amundi U.S. recently commemorated significant anniversaries for two funds focused on Insurance-Linked Securities and Catastrophe Bonds. These markets have experienced rapid growth, offering investors valuable diversification and alternative income opportunities within the fixed-income space.
“We have been pleased with investor reception for this asset class and acknowledgment of potential investment benefits of allocating to the market segment,” said Jonathan Duensing, Head of Fixed Income at Amundi U.S.
The Pioneer CAT Bond Fund reported an annualized total return of 14.44% as of January 31, 2025. The fund now manages assets exceeding $700 million. Its performance has remained consistently strong, with a one-year return of 14.23% and a six-month return of 9.13%. This performance highlights the growing demand for catastrophic bonds, a sector increasingly viewed as an attractive fixed-income alternative.
The Pioneer ILS Interval Fund achieved an annualized total return of 5.21% through January 31, 2025. The fund currently manages $652 million in assets. Over the past year, it delivered a return of 15.81%, while its five-year annualized return stands at 8.34%. These results underscore the value of ILS as a means of portfolio diversification and a reliable alternative income source.
“We continue to believe both of these differentiated fund offerings are attractive options for investors seeking alternative income solutions,” said Chin Liu, Director of Insurance-Linked Securities and Fixed Income Solutions at Amundi U.S.
Pioneer CAT Bond Fund
Cumulative Returns
1 – month: 0.46%
3-month: 3.03%
6 months: 9.13%
Average Annual Total Return
1-year: 14.23%
Since Inception in 1/26/2023: 14.44%
Gross Expense Ratio: 2.12% / Net Expense Ratio: 1.51%
Pioneer ILS Interval Fund
Cumulative Returns
1-month: 1.34%
3-month: 2.50%
6-month: 7.58%
Average Annual Total Return
1-year: 15.81%
5-year: 8.34%
10-year: 5.24%
Since Inception on 12/17/2014: 5.21%
Expense Ratio: 1.95%
With favorable market conditions, Amundi U.S. is well-positioned to continue its leadership in the ILS and CAT bond markets. The increasing demand for alternative investment solutions, coupled with the continued growth of these sectors, offers investors compelling opportunities for portfolio diversification and enhanced income.
Following its Annual Shareholders’ Meeting, Raymond James Financial has officially announced that Paul Shoukry has assumed the role of CEO, becoming the firm’s fourth chief executive. This transition was first announced in December 2024, when the Board confirmed his appointment to succeed Paul Reilly, who is stepping down from his responsibilities to become the firm’s new executive chairman.
“We congratulate Paul and thank Paul Reilly for his 15 years of leadership as CEO as he transitions into the role of executive chairman of the Board of Directors at Raymond James Financial,” the company has stated
In addition to being CEO, Shoukry also serves as president of Raymond James Financial and is a member of the company’s Executive Committee. Before assuming these roles, he was the firm’s chief financial officer (CFO) from 2020 to 2024. He joined Raymond James in 2010 as part of the company’s Assistant to the President program.
Regarding his education and professional background, Shoukry earned an MBA with honors from Columbia University. Before pursuing his graduate degree in business, he worked at a strategic consulting firm specializing in financial services. He began his career as a commercial banker after graduating magna cum laude with a Bachelor’s and Master’s degree in Accounting from the University of Georgia, where he was a Leonard Leadership Scholar.
Following the Board’s confirmation of his appointment in December 2024, Jeff Edwards, an independent director of the Board, stated: “Paul Reilly and the rest of the Board fully agree that the time has come to move forward with our long-term succession plan. Paul Shoukry is an exceptionally talented leader, well-qualified to work alongside our strong management team. I am confident that he will build on the firm’s outstanding track record and the legacy of first-class client service that began with Bob and Tom James and flourished under Paul Reilly’s leadership. We are pleased that Paul Reilly will remain as full-time executive chairman, much like Tom and Bob James executed and supported their succession plans.”
Vanguard has launched two new fixed-income ETFs designed to provide investors efficient, low-cost exposure to U.S. Treasury securities. The Vanguard Ultra-Short Treasury and 0-3 Month Treasury Bill ETF offer short-duration options for investors seeking flexibility and liquidity in their portfolios.
“These products serve as valuable tools for advisors and investors to build more precise and flexible portfolios, bridging the gap between money market funds and existing ultra-short-term bond offerings in the ETF wrapper,” said Sara Devereux, Global Head of Vanguard Fixed Income Group
The new ETFs will be managed by Josh Barrickman, Co-Head of Vanguard’s Fixed Income Group Indexing in the Americas.
VGUS will track the Bloomberg Short Treasury Index, focusing on Treasuries with maturities under 12 months, while VBIL will track the Bloomberg U.S. Treasury Bills 0-3 Months Index. Both funds feature an expense ratio of 0.07%, positioning them as low-cost leaders.
Managing over $2.5 trillion globally, Vanguard Fixed Income Group will advise the new ETFs, continuing its legacy of low-cost, efficient bond indexing.
Despite Donald Trump’s return to the White House and the rise of right-wing parties in Europe, asset managers remain optimistic about the outlook for sustainable investment this year. So far, sustainable investment funds have shown significant growth in recent years. According to 2023 data, these funds reached approximately €500 billion in assets under management, with Europe accounting for 84% of this total—around €420 billion.
How Do Investment Firms View 2025?
According to Pascal Dudle, Head of Thematic and Impact Investing at Vontobel, sustainability will remain important despite challenges posed by recent political shifts. It will be driven by companies maintaining their commitment for reasons ranging from economic opportunities to risk management.
“A key example of this was the unexpected yet encouraging support from ExxonMobil’s CEO during COP29 in November, urging incoming President Trump not to exit the Paris Agreement and to keep the U.S. Inflation Reduction Act (IRA) intact. 2025 will also see continued investor scrutiny of the myriad ESG approaches being offered, with stricter strategies, such as impact investing, likely among the winners,” says Dudle.
He also believes that energy transition is here to stay, as clean technologies are now economically viable, scalable, and come with limited technological risk. “The need for reliability and resilience should, in particular, drive investments in infrastructure, such as increasing investment in power grids to ensure their reinforcement and modernization,” he adds.
Trump’s Challenge to Sustainable Investment
While investors—and Europe—continue their shift towards sustainability, the Trump administration has taken a different path. His first term was marked by rollbacks in environmental protections, the U.S. withdrawal from the Paris Agreement, and skepticism toward climate science. These policies affected the global sustainable finance ecosystem, meaning his return could once again test the resilience of ESG investment.
In his second term, Trump has declared a “national energy emergency,” in line with his campaign promises. According to experts at Allianz Global Investors, the measure aims to strengthen the U.S. fossil fuel sector, the world’s largest oil producer, and cut energy prices by 50%.
“His actions will complicate the fight against climate change. Additionally, skepticism surrounds Trump’s ability to halve energy prices as he claims. During the 2020 pandemic, even when oil prices turned negative, U.S. energy costs only dropped by 19%. Other factors, such as his order to replenish the Strategic Petroleum Reserve, could even push prices up in the short term,” state Greg Meier, Senior Economist at Allianz Global Investors, and David Lee, U.S. Energy Sector Specialist at Allianz GI.
Their conclusion is clear: “While Trump’s actions reinforce his commitment to fossil fuels, their actual impact on lowering energy costs will likely be limited and far from his stated expectations.”
Key Takeaways for Investors
In this context, Sophie Chardon, Head of Sustainable Investment at Lombard Odier Private Bank, believes investors should focus on sectors less exposed to political shifts, such as infrastructure, digitalization, energy efficiency in buildings, water management, and precision agriculture.
“From an investment perspective, Trump’s second administration could increase sectoral and regional divergence as the U.S. loses momentum in sustainable investments. After the sharp declines in sustainable investment valuations in late 2024, earnings dynamics are now in control, making stock selection crucial,” Chardon explains.
She also highlights that while the U.S. may slow its climate efforts under Trump, global momentum—especially from China and the EU—should keep the transition to green energy moving forward.
“Investors will need to focus on sectors that are less exposed to policy risks and on those aligned with long-term demand for clean technologies, infrastructure, and climate resilience,” she insists.
Europe’s Advantage in ESG Investment
According to Deepshikha Singh, Head of Stewardship at Crédit Mutuel Asset Management, investment prospects remain uneven.
“Investors may witness significant rollbacks in federal climate action and reporting standards. Trump’s pick to lead the SEC, Paul Atkins, has been openly opposed to the SEC’s climate disclosure rules. However, states like California and New York will likely continue setting ambitious climate goals,” Singh states.
Despite this, Singh sees Europe maintaining its leadership in sustainable investment, which could be a key advantage for investors.
“European companies that align with strict ESG regulations could attract more capital, while U.S. companies struggling to meet international standards could face higher costs and reduced access to foreign markets. The alignment of the European financial sector with the Paris Agreement and COP29 goals presents opportunities for those prioritizing green investments.
Additionally, Europe may seek to influence global financial markets by expanding ESG disclosure requirements for internationally operating companies, which could impact U.S.-based multinationals and other global corporations,” Singh explains.
The Future of ESG Investment Amid Political Cycles
For Singh, sustainable investment’s resilience lies in its ability to adapt to political cycles. While she acknowledges that Trump’s policies may pose challenges for some aspects of ESG investing, she sees it as unlikely that the overwhelming global shift toward sustainability will be reversed.
“Investors, driven by both risk management and opportunities, will continue to integrate ESG factors into their portfolios, even in the face of opposition. The demand for transparent and responsible investments will persist, regardless of who is in the White House.
In fact, Trump’s second term could even emphasize the urgency of private-sector leadership in driving the sustainable investment movement in the U.S. and beyond,” Singh concludes.
