There are few precedents for a single party wielding as much power in Washington as Republicans do now, yet the effects of Donald Trump’s presidency are still the great unknown. Aite believes 2017 will foster an environment of less regulation, reversal of numerous policies and diminished enforcement of existing laws. There is likely to be a lot of policy noise, but all indications point towards an America-first philosophy that should propel markets. Aite said advisors can be sensible by waiting to make investment decisions until expected returns can be better quantified, and take a pragmatic approach to fundamentals like interest rates. One positive effect of the uncertainty that advisors can capitalize on: There has never been a better reason to engage in meaningful conversations with clients.

A lot has been made about delaying or repealing the rule, putting many firms into a wait-and-see mode. Aite says that's a mistake. Advisors need to continue their work to come into compliance with the rule. First of all, the law remains in effect unless otherwise noted, and firms shouldn’t be caught unprepared. Second, the market is pushing the industry towards conflict-free advice anyway, and firms miss an opportunity to turn future news about the fiduciary rule, no matter which direction it goes, into a sales opportunity or positive public messaging.

And not just with the fiduciary rule. Aite says wealth management firms should still focus on complying with all existing rules and complying with changing global regulatory landscape, and not count on anything being rolled back. Europe in particular is implementing new rules that require extensive understanding, project design and implementation to comply.

In addition to changing regulations, the market is increasingly sophisticated, creating a demand for greater focus and specialization. Aite says wealth managers will have to abandon the in-house, one-size-fits-all mentality, especially with technology. The most successful firms will open up and embrace partnerships, cooperation and co-development with sector-focused technology firms.

New competition from firms aggressively going after retail investors across the market is forcing traditional high-net-worth shops to re-evaluate their products and services. Aite predicts even further segmentation, and not just around asset level but around age, profession, financial goals and service preferences. The successful firms will utilize technology to deliver personalized service across client segments.

Digital advice’s place in the industry was set firmly, and forever, in place in 2016, and the robos’ influence will only spread. Aite expects 2017 to see full-service wealth management firms start to roll out their own digital platforms, though use cases will vary. Some will reshape their business model to place robo advice in front of clients, while others will keep it running under the hood. Full-service firms will find new ways to benefit from robo advice, such as lowering manufacturing costs or introducing high-end brands to lower segments.

Aite says changing business models, increased segmentation and competition in the digital advice space from full-service firms means wealth managers must adopt hybrid strategies to attract larger wallet share from multiple customer segments if they want to be successful. Creating new efficiencies and revenue opportunities will be key, which Aite said can be accomplished via self-service tools and automating rote advisor tasks.

The lines between business and technology are blurring, and being in control of the technology stack is more important than ever. Expect the rate of transactions to increase in 2017, with the focus being on smaller technology companies that help firms evolve with the major trends listed here. The technologies acquired will be able to tightly integrate with a firm’s existing infrastructure and data, create customizable client and advisor experiences, enable a full spectrum of services (from full-service to hybrid to self-service), and support low-cost investment management.

Many predict 2017 to be the year in which technology firms introduce practical and useful applications of artificial intelligence, or machine learning, in wealth management. Aite says AI can play a role in everything from investing and trading to product recommendations, customer services, marketing, compliance and cybersecurity. Advisors should be early adopters if they want to grow. As Aite says, this is just the beginning.

Though many in the industry still completely miss the point of blockchain, the technology that underpins digital currencies like bitcoin, it presents a never-before-seen opportunity to re-imagine how advisors deliver services. This ignorance will translate into market loss, Aite says, but not quite yet. First, regulators have a lot to figure out, like how to ensure safeguards that can protect the blockchain’s integrity. While no firm actions are expected in 2017, Aite expects regulators around the world to begin publishing papers detailing their positions.