The valuation gap between public and private real estate has persisted, creating potential buying opportunities for investors. REITs have generally maintained higher or comparable occupancy rates relative to private real estate across major property sectors. 

They also remain more attractively priced, with cap rates exceeding those of private real estate, suggesting better value. In the fourth quarter of 2024, public-private cap rate spreads ranged from 80 to 169 basis points, highlighting REITs' pricing advantage. 

Strong operational management and asset selection contribute to REITs' higher occupancy rates, particularly in retail and office spaces. 

Finsum: REITs continue to offer investors access to high-quality properties at compelling valuations and could provide more inflation resistance. 

Private equity thrived during the low-interest-rate era, leveraging debt to enhance returns, but changing financial conditions are testing its resilience. While assets under management continue to grow, firms are struggling to deploy capital and exit investments, with a rising backlog of unsold assets. 

Higher interest rates have complicated deal economics, and a shifting IPO landscape has limited traditional exit strategies. Regulatory scrutiny, particularly on antitrust grounds, has also slowed transactions, making liquidity harder to generate. 

Despite these challenges, liquidity remains accessible through dividend recapitalizations and secondary sales, suggesting the industry’s issues are cyclical rather than existential. 

Finsum: If we are entering a more volatile financial era, private equity’s debt-driven model may need to adapt to a world less favorable to leverage.

The rise of private credit has reshaped the landscape of speculative-grade debt, absorbing many of the riskiest borrowers that once relied on public high-yield bonds. With banks retreating from direct lending due to regulatory constraints, private credit firms have stepped in, fueling a market now worth $2.5 trillion globally. 

This shift has left the high-yield bond market with a stronger credit profile, narrowing yield spreads and reducing volatility. However, private credit’s lack of transparency means that credit risk hasn’t disappeared—it has simply moved to a space where prices and risks are less visible. 

While public high-yield bonds have become scarcer and more expensive, some riskier borrowers are returning to public markets through structured investment vehicles. Ultimately, as economic conditions shift, both public and private debt markets may face renewed pressures, exposing hidden risks within private credit’s rapid expansion.

FINSUM: Though private credit obscures some risks, economic stress could still expose vulnerabilities across both public and private debt markets.

Estate planning is becoming a key differentiator for financial advisors, with 80% of clients expecting support in this area, yet many advisors still overlook it. A significant gap exists in tax planning, as nearly 90% of clients worry about tax impacts, but less than half have taken proactive steps. 

Beyond taxes, estate planning ensures smoother asset transfers, addresses state-level taxes, and clarifies how heirs receive funds. Many clients also lack knowledge about trusts, particularly the benefits of revocable versus irrevocable structures. 

Advisors who integrate estate planning into their services are growing their books faster by attracting new clients and strengthening relationships.

Finsum: Advisors who ignore it risk losing assets to competitors who offer these essential services.

Defined contribution plans in 2025 will increasingly focus on generating sustainable retirement income as Social Security’s future remains uncertain and traditional pensions decline. 

In-plan retirement income products, such as annuities, hybrid target-date funds, and systematic withdrawal strategies, will see greater adoption, driven by regulatory clarity from the SECURE Act and SECURE 2.0. AI-powered digital tools will enhance retirement planning by offering personalized projections, dynamic withdrawal strategies, and automated guidance on Social Security and tax-efficient drawdowns. 

Employers will expand financial wellness initiatives, providing targeted pre-retirement education on income strategies, healthcare costs, and managing distributions. Recordkeepers and investment firms will integrate advanced retirement income solutions, making it easier for participants to transition from saving to spending. 

Finsum: Regulatory support is expected to continue, reinforcing the shift toward holistic, income-focused retirement planning.