Significant regulatory changes in 2025 will reshape wealth management, creating new challenges and opportunities for Wealth Managers, Family Offices, and Banks.

Regulatory shifts continue to shape strategic priorities, making a proactive approach essential for long-term success. Understanding European regulations is critical for wealth managers to maintain a competitive edge and mitigate compliance risks. Proactively adapting to these changes gives wealth managers a strategic edge, enabling them to refine long-term strategies with confidence.

To help you prepare, we’ve gathered insights from industry experts and analyzed upcoming regulatory developments. Below, we outline the key regulations set to shape the sector in 2025 and their potential impact.

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Key Takeaways

• Regulatory shifts in 2025 will reshape wealth management, driving firms to prioritise compliance, digital transformation, and client transparency.
• The Retail Investment Strategy (RIS), PSD3, and FIDA will introduce stricter financial data regulations, enhancing transparency, accessibility, and open finance adoption.
• ESG-related regulations will become stricter, demanding more comprehensive sustainability reporting and responsible investment strategies.
  
  

Regulatory Developments in 2025: what’s changing in European Wealth Management?

The regulatory landscape in Europe is becoming increasingly interconnected, driven by a commitment to transparency, accessibility, and sustainability. Here are the top three regulatory developments that our experts consider are set to reshape the industry this year:

1. Retail investment strategy (RIS): stricter data & suitability rules for wealth managers

The Retail Investment Strategy (RIS), part of the European Commission’s broader push for financial inclusivity, is designed to increase transparency and lower barriers to market access for retail investors.

RIS introduces enhanced aggregation tools, allowing clients to consolidate and manage their investment portfolios more efficiently. This will increase competition, as investors can compare options more easily and make better-informed decisions.

For wealth managers, this shift represents both an opportunity and a challenge:

• Opportunity: firms that invest in tech-driven solutions will strengthen client relationships and differentiate through personalized advisory.
• Challenge: significant investments in digital infrastructure are required to keep pace with rising expectations.

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💡 Strategic preparation: wealth managers should start adapting now to ensure smooth compliance and avoid last-minute disruptions when RIS takes effect (expected 2026/2027).

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"(...)Europeans are good savers but less likely to invest and this retail strategy aims to unlock the investment potential of savings. The best way to do this is to ensure they are better informed, get a fairer deal and are better able to meet their long-term financial objectives. (...)" - Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union

2. PSD3 regulation: fueling payment security and data transparency in wealth management.

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The third iteration of the Payment Services Directive (PSD3) aims to close interoperability gaps, enhance data security, and streamline open banking. It will standardise financial data access, making it easier for clients to consolidate and track their wealth across different platforms.

PSD3 aims to reinforce trust in the open banking ecosystem by mandating the use of secure APIs and introducing stricter oversight for third-party providers (TPPs). This is particularly relevant for wealth managers, as clients increasingly expect seamless access to their investment and payment data across multiple platforms.

For wealth managers, PSD3 presents both benefits and operational challenges:

• Opportunity: firms that leverage standardized data access can improve client insights and enhance their personalized wealth management services.
• Challenge: compliance will require upgrading existing systems to meet new security and governance requirements.

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💡Strategic preparation: enhance API security, invest in AI-driven analytics, and collaborate with fintech partners for compliance and seamless data access.

3. FIDA: enhancing financial data access for smarter and client-centric decisions.

The Financial Data Access Regulation (FIDA) represents a significant leap beyond open banking into open finance. Unlike PSD3, which focuses on payments and transaction data, FIDA unifies access to all types of financial data, including investment accounts, pensions, and insurance products.

For wealth managers, FIDA’s promise lies in the ability to unify wealth data, offering clients a seamless, cross-platform financial overview. This could revolutionise client advisory by enabling highly tailored, data-driven strategies. However, compliance will require firms to invest in robust data management and ensure alignment with FIDA’s privacy and security requirements.

“Open finance is the natural next step, empowering consumers with greater control over their financial data and creating a seamless experience across financial products,” stated a European Commission policy document on FIDA in late 2024.

💡 Strategic preparation: build compliant data-sharing frameworks, leverage AI-driven tools for personalized insights, and collaborate with regulators & fintechs to ensure open finance security.

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4. ESG Regulations in 2025: stricter compliance and sustainable investment strategies.

Sustainability remains high on the regulatory agenda in Europe and the US, with frameworks becoming stricter and more comprehensive. Wealth managers must align their strategies with a growing list of ESG regulations to meet client expectations and compliance demands.

In Europe, the following ESG regulations will shape investment strategies in 2025:

• The Corporate Sustainability Reporting Directive (CSRD) mandates detailed ESG disclosures for large firms and financial products.

• The Corporate Sustainability Due Diligence Directive (CSDDD) requires firms to assess environmental and human rights risks across supply chains.

• The Sustainable Finance Disclosure Regulation (SFDR) imposes strict transparency requirements on asset managers to disclose sustainability impacts.

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Wealth managers must integrate evolving ESG regulations into their investment strategies to stay compliant and meet client expectations. While the regulatory burden increases, it also creates opportunities to differentiate services by delivering impactful, ESG-aligned portfolios.

💡 Strategic preparation: ensure access to reliable ESG data, integrate sustainability metrics into investment strategies, and enhance reporting frameworks to meet compliance and client transparency demands.

Conclusion

In 2025, RIS, PSD3, FIDA, and ESG regulations will accelerate the transition towards a more transparent, standardised, and accessible financial ecosystem. While challenges undoubtedly lie ahead, these developments also present opportunities to enhance service offerings, streamline operations, and deepen client relationships.

Wealth managers who proactively embrace regulatory compliance, leverage technology, and integrate ESG principles will gain a competitive edge in this wealth management changing landscape.

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