What’s in store for 2024?

10 trends that may shape the year for financial professionals

As we begin 2024, there are a number of topics capturing the minds of financial professionals and those who cover developments across the industry. To help you sort through what can sometimes feel like a flood of information, we’ve put together a high-level survey of the topics being widely identified as potentially affecting the way money is managed in 2024:

1. Possible recession/slowdown

While it’s true that the recession that many anticipated in 2023 did not materialize, some strategists from JP Morgan still say that the U.S. economy is likely to slow in 2024, although they predict that a recession will be avoided.¹ Still, a slow economy might have an effect on the decision-making processes for financial professionals and their clients. 2024 might end up being a time when many choose to seek out “pockets of opportunity.”²

2. The interest rate factor

Given the recent increase in bond yields, the potential impact of higher interest rates is a topic currently being given a good deal of consideration. What would a 5% interest rate mean for the economy, as well as for individual portfolios? Where’s the smart place to put money in such an environment? These are questions that financial professionals are likely to be facing in 2024.

3. The impact of the 2024 election

According to a survey conducted by the Nationwide Retirement Institute, almost half (45%) of investors believe that the 2024 presidential and congressional elections will have a greater impact on their retirement plans and portfolios than market performance will. That is an astonishing statistic — and it’s one that financial professionals might want to keep in mind as they hold strategic discussions with their retirement-minded clients.

4. Workplace-based financial advising

Morgan Stanley’s exiting CEO James Gorman said earlier this year that he expects the workplace to be Morgan Stanley’s largest source of net new assets in the next 10 years.³ That’s a powerful perspective on this ongoing trend. In reality, there could be a number of reasons why the workplace might become a more prominent playing field for delivering financial advice. Companies have long used benefits packages to attract talent, and the most desirable candidates frequently expect equity in the company. This means — more and more — financial professionals may be seeing a significant share of their clients’ wealth being managed in workplace plans.

5. Stocks vs. bonds vs. cash

This is a classic investment dilemma but, given the interest rate factor as discussed on #2 of this list, 2024 might make it a bit more pressing. Rising interest rates could point to cash, but inflation might still play a role, and the main question that many financial professionals may be asking their clients in 2024 is: Can cash get you to your goals? Cash could be the correct position (or not), but generally speaking, starting with the goal and working backwards to the strategy could be the right approach to determining the amount any given client allocates to cash vs. stocks vs. bonds in 2024.

6. AI

The “I” might stand for “intelligence,” but the “A” probably has more to do with “agility.” Generative AI will be a disrupter one way or another. Without getting lost in speculation about the capabilities that AI may demonstrate in 2024, the big-picture perspective requires staying nimble and tracking the developments, not only in how AI can be applied but in how it begins to be regulated in the field of investment strategies. Vaibhav Kakkar, CEO, Digital Web Solutions points out that “the adoption of emerging technologies such as artificial intelligence (AI), blockchain, and digital currencies have the potential to transform various aspects of finance, including payment systems, risk management, and investment strategies.”

7. The use of model portfolios

According to Forbes, “Model portfolios are like templates that aim to deliver a set return for a given risk profile.” These templates can be applied to the goals of individual investors relatively quickly and easily. Some investors see model portfolios as a way for individual financial advisors to deliver the same investment mix, based on the same insights, that many of the larger, institutional clients are given — theoretically with the same potential for outsized returns.

8. Sustainable investing

Sustainable investing continues to take a growing share of mind as individuals look for ways to align their values with their investments. Today’s investors are looking not only at the bottom line but at how that line is reached and whether a company is making a positive impact along the way. The experts who watch trends at LinkedIn predict that “in 2024, this trend will continue to grow as investors emphasize responsible investment choices.”⁴

9. Digital-first transactions

COVID significantly accelerated the move to digital payment platforms, and experts agree that there is little question about whether this trend will continue, resulting in a further decline in cash transactions and a further rise in the acceptability of alternative payment methods.⁵ This may also begin to include cryptocurrencies. The consensus appears to be that players across the financial field will continue to evolve toward digital-first transactions.

10. Real estate technology

For clients interested in real estate investing, property technology (“PropTech”) promises to continue to have a significant impact on the way real estate is bought and sold. Anyone looking for a home has already encountered PropTech in the form of robust online listings and virtual property tours, but the experts say that developments such as blockchain-based property records are likely to become more common, which could have a significant impact on simplifying real estate transactions.