Happy Sunday, and welcome to Benzinga’s financial advisor newsletter.

Today we’re discussing the big changes coming to the financial advisor industry, and how to set your business up for success in 2025 and beyond.

So, let’s get into the Industry Chatter!

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INDUSTRY CHATTER

Set Your Advisory Business Up For Success In 2025

The advisory landscape is undergoing a fundamental transformation that demands immediate action from financial advisors. While firms like Creative Planning have achieved remarkable $16 billion valuations, traditional business models face mounting challenges that require strategic adaptation, Financial Advisor Magazine argues in a new article.

Client retention, long considered a strength of advisory firms, may be more precarious than assumed. Research from CEG Insights and J.D. Power suggests that current retention rates stem more from bull market conditions and client inertia than genuine loyalty. This vulnerability is compounded by the impending generational wealth transfer, with 41% of advisors viewing inheritance-related asset shifts as an existential threat.

Sign Clients Before They’re Wealthy

Forward-thinking advisors must pivot toward serving younger, high-earning clients in their 30s who seek fundamentally different services. These emerging affluent clients require guidance on compensation negotiations, stock options, debt management, and business development. While potentially less profitable initially, establishing relationships with this demographic now positions advisors for substantial recurring revenue growth in the coming decades.

The market is evolving toward specialized service models based on client net worth and specific needs. Ultra-affluent clients ($25M+) demand comprehensive family office services, while the "merely affluent" ($5M-$25M) prefer à la carte offerings. Successful firms will need to choose their focus area, whether it's building 401(k) platforms with wealth management capabilities, specializing in specific professions, or serving the broader middle class.

Healthcare Planning Is A Growing Need

Healthcare planning has emerged as a critical service area, with 68% of ultra-high-net-worth investors identifying it as a primary concern. Advisors must forge strategic partnerships with healthcare professionals to deliver concierge medicine services. Additionally, entrepreneurial clients increasingly seek advisors who can assist not just with wealth management but wealth creation, requiring expertise in startup management, business valuation, and succession planning.

The key message for advisors is clear: the era of being all things to all people is ending. Success in 2035 and beyond will require selecting a specific focus area, developing deep expertise, and delivering demonstrably superior value in that niche. Advisors must begin this transformation now to remain relevant and competitive in the evolving advisory landscape.

MARKET RECAP

Stock Markets Extends Record Highs, US Labor Market Recovers, Bitcoin Hits $100,000: This Week In The Markets

The U.S. stock market posted another week of strong performance, with major large-cap indices such as the S&P 500, the Dow Jones and the Nasdaq 100 extending their record highs.

Technology and consumer discretionary sectors led the gains, driven by several mega-cap tech giants – Apple Inc. (AAPL), Amazon.com Inc. (AMZN) and Meta Platforms Inc. (META) – hitting new peaks.

In November, the U.S. labor market showed robust signs of recovery, with nonfarm payrolls rising by 227,000, up sharply from an upwardly revised 36,000 in October and above expectations of 220,000. The unemployment rate inched up to 4.2%, as expected, while average hourly earnings slightly exceeded forecasts.

The University of Michigan’s consumer sentiment index revealed the most favorable overall conditions in seven months, bolstered by a significant rise in the current economic conditions subindex. Yet, the survey also highlighted growing concerns over inflation, with short-term inflation expectations rising. A relevant share of consumers reported advancing purchases of durable goods due to fears of accelerating inflation in the future.

Bitcoin (BTC/USD) dominated economic and financial headlines, surging above $100,000 for the first time ever on Wednesday.

What You Might Have Missed

Stellantis CEO Departs

Stellantis N.V. (STLA)'s CEO Carlos Tavares exited, intensifying market concerns after a 50% value drop in 2024. Leadership uncertainty now threatens recovery, with analysts warning of escalating challenges in a highly competitive automotive industry landscape.

Bitcoin Caution Advised

A veteran trader urged caution on aggressive Bitcoin and equity longs amid rising market volatility. The warning highlights the importance of prudent risk management and strategic positioning in an unpredictable cryptocurrency landscape.

Top Santa Stocks

There are 10 S&P 500 stocks that historically excel in December's second half. These consistent performers leverage the Santa Rally effect, presenting investors with strong year-end opportunities for potential portfolio growth.

Prominent Trader Drops Tesla Short

A prominent trader exited his Tesla (TSLA) short position, citing a shift in fundamentals and Elon Musk's evolving relationship with President-elect Donald Trump. Tesla shares are up 41% year-to-date, with analysts growing bullish.

Powell On Bitcoin

Fed Chair Jerome Powell likened Bitcoin to gold, describing it as virtual and digital. His remarks underline Bitcoin's growing status as a speculative asset and a store of value in the evolving financial ecosystem.

THE WEEK AHEAD

Retailer earnings, international interest rate decisions, and US inflation expectations

Economic Data

• Monday: US consumer inflation expectations, Australian interest rate decision

• Tuesday: US quarterly productivity and labor costs

• Wednesday: Canadian interest rate decision, US consumer price index

• Thursday: Eurozone and Swiss interest rate decisions, US producer price index

• Friday: US import and export price index

Earnings

• Monday: Oracle (ORCL), Toll Brothers (TOL), C3.ai (AI)

• Tuesday: United Natural Foods (UNFI), AutoZone (AZO), Sportsman’s Warehouse (SPWH)

• Wednesday: Adobe (ADBE), Oxford Industries (OXM)

• Thursday: Costco Wholesale (COST), Broadcom (AVGO)

• Friday: US Gold (USAU)

Click here for the full calendar of economic data and earnings reports.

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