Future-Proofing Wealth: Australia’s 2025 Advice Lessons

2025 has been a year of volatility and surprises for markets. How has that influenced portfolio construction for advisers and their clients?

It certainly has been an interesting and eventful year - and it’s even not over yet! From the early year DeepSeek sell-off to Liberation Day tariffs to US airstrikes on Iran, then a US government shutdown, followed by tech bubble concerns – it’s just been incredible.

How do you stay on top of portfolio construction with that backdrop! It’s difficult. Advisers are increasingly looking to engage more professional expertise to assist with their clients’ portfolios, and why wouldn’t they? Advisers are seeing so much demand for their advice, that the time saved can be used to sit in front of more clients.

For those building portfolios themselves, ETFs are increasingly in vogue as they allow for quicker switches and less time out of market. Finding ways to build resilience in their portfolios is also increasingly important – “how can I better diversify my portfolios?” is an increasingly common question.

Off the back of this, what asset classes or themes have you seen take off in the adviser segment this year?

It’s no secret that private markets are generating more and more interest, however the reality is that this is still a fairly limited space for advisers providing advice to retail clients, and the lack of transparency can also be a problem. Private credit aside, gold, small cap equities, emerging markets and Aussie credit have also gained more interest in 2025 and have delivered strong returns within portfolios.

Total returns across asset classes, 2018-2025 (YTD)

How are advisers preparing for 2026 – what are the areas that you are getting questions on as we approach the end of year?

Probably the most common ones we are hearing are:

1. Is AI and tech in a bubble?
2. How can I invest more into private markets?

In terms of how advisers are running their practices, how have you seen this change in recent years and what is BlackRock focusing on when it comes to supporting adviser businesses?

It’s no surprise that managed accounts are still seen as a solution and something we are really leaning into at BlackRock. We have a world class multi-asset team that put together premium portfolios, and this is how we serve this need.

Outside the investment piece, Advice tech is increasingly important, with advisers exploring AI more and more, and I also think we are on the cusp of really big things in that space, that will assist advisers to really scale their businesses, and allow them to service more clients.

Locally, we’ve seen adviser numbers grow this year and continuing consolidation within the larger independent licensees. How has this affected the way BlackRock looks to service the adviser market going forward?

It’s a bit early to say that we are seeing sustainable growth in adviser numbers. I think it’s more a plateauing in the decline, but there are green shoots for sure. As an industry we have a lot of work to do to promote financial planning as a profession with school leavers. They still don’t really understand what it is and how it can be a fulfilling career.

Consolidation is very real however, and being driven by things like succession planning, pooling resources and even offshore capital. We are watching this very closely. We are really developing our tech around model portfolio solutions, so to be able to cater for more ‘investment appetites’ that sit within a single firm. As an example, we partnered with Lonsec/Evidentia to offer tailored portfolios at scale - this allows for a firm or adviser to apply some of their own tweaks to a dealer group parent model, yet remain within the scheme.

What ‘gaps’ do you think still exist in the market that advisers need help with?

For retail advice, there is still a gap when it comes to private markets strategies, and more broadly alternatives, that are fit-for-purpose. In particular, alternatives that are more defensive in nature and genuinely uncorrelated with equity and credit markets, especially in times of market stress. We are striving to solve for this.

ETFs have continued to grow in leaps and bounds over 2025, with Australian industry AUM swelling by almost 40% in the year to October². How have advisers used ETFs in portfolios this year and what are the trends to look out for in 2026?

The ETF wrapper is being seen as a good tactical structure that can facilitate quicker switches – especially within the fast-growing managed account space. But the real growth, I think, is in active ETFs, which should have a place in a well-built portfolio, given the dispersion we are seeing within markets and across geographies – a far better backdrop for skilled active managers to deliver alpha.

Top 10 iShares ETFs by inflows, 2025 (year to date)