La Plus ca Change: Digesting Investing 2024

The French have a saying “le plus ca change, plus c'est la même chose.” The more things change, the more they stay the same. It’s tempting to say that the key themes of 2024 for the investment profession were the same as for years past. You might even ask yourself, is it worth it to do a year in review? We think so for two reasons: the first is to remind ourselves of all that happened. 2024 was a lot! The second reason is that taking stock of all that happened in a year can help assess and prepare for the next year. Especially if things will stay the same. In this article, we’ll take a look back at the major trends we spotted in 2024 and offer a few thoughts on what might be coming for 2025.
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Not Just New Regulations, but Changes to the Power to Regulate

This summer, the Supreme Court handed down a few opinions which limited the extent of discretionary power that regulatory agencies have. While it isn’t clear how this will affect financial advisors, it’s clear that agencies such as the SEC or DOL will need to curtail some of the proposed rule changes they had slated for 2025.^[1]
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Two cases of direct importance are Jarksey and Loper Bright. In its Jarksey opinion, the Supreme Court ruled that a federal agency cannot try cases involving civil laws (not federal penalties) in the agency courts. In the past, agencies would rely on administrative law judges to hear these cases. This curbs how an agency enforces its rules. In its opinion in Loper Bright, the Supreme Court’s similarly curtailed an agency’s ability to create rules in the gaps left by federal law. Previously, the Supreme Court had ruled that the agency’s rulings must be held even when a federal court would interpret the law differently. In Loper Bright, the court overruled its earlier holdings but held all previous decisions by regulatory agencies will stand. That means, to date, nothing has changed.^[2] However, the DOL’s proposed fiduciary duty rule could be tabled change due to this opinion. It remains to be seen if the DOL’s independent contractor rule could be curtailed as well.^[3]
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We also were watching the Court for a ruling in the Facebook v. Amalgamated Bank case. That case involved disclosure of risk in securities offerings and the class actions. The case had a broad impact on the investment industry. Yet, after hearing arguments from both sides, the Court found that Facebook’s defense lacked substance and ruled that the petition to be heard was “improvidently granted.” In other words, the lower court ruling concerning a risk that materialized in the past and disclosure stood. The class action will proceed against Facebook, and we will keep our eyes on it.
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It is also worth noting that the DOL’s enforcement division, the EBSA, has been reporting a decrease in smaller recoveries in its enforcement actions. This may signal that EBSA may be changing its focus from a higher volume of cases to focus on cases with broader impact.^[4] A handful of other laws and regulations may be worth watching in 2025. This includes state laws on cybersecurity insurance. ^[5]
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New Options in MEPS and Annuities

Just as with other political years, the market was notable for volatility and concern over inflation. It’s also not groundbreaking to assert that there may be a quarter or two of volatility in the markets as the Trump Administration begins its executive agenda. There are other aspects of changes to the investment market that are worth noting. One includes a gap in knowledge between what’s possible and what is currently happening concerning small firms and associations. The gap between new, more lenient regulations on who can qualify as an employer under ERISA and providing those plans might be filled by financial advisors if advisors can understand how to market their services to those groups.^[6]
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New studies and statistics released in 2024 showed a gap between a desire for guaranteed retirement income and familiarity with annuities. A poll by USAA found that 58% of adults understand that annuities are retirement savings products, but 42% of them do not understand the details of annuities, even though advisors are twice as likely (80% to 40%) to include annuities as asset protection and diversification tools over EFTs.^[7]
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Changes in Financial Advisor Practice

We noticed changes in practice this year for advisors both towards their clients, their firms, and the structure of those firms. We discussed that advisors were often having to expand their practice from advising individuals or couples to incorporating multiple generations.^[8] We also discussed how advisors might need to change their practice to address the aging of their clients: “That is, advisors may want to try talking about planning for ‘longevity’ rather than ‘aging.’”^[9]
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Broader trends were also starting to appear to the practice of financial advising. One trend included a demographic change towards more women in leadership roles in advisory firms. Though the extent and access to such leadership growth is potentially up for debate, statistics do show a trend towards more equity.^[10] Another trend involves how AI is used in advising. That includes both intentional use of AI, something disfavored by potential clients, as well as unauthorized use of AI tools by employees at work.^[11] However, AI may be helpful in monitoring risk, a significant concern of large plan sponsors due to volatility. Those sponsors may be heading towards a deeper level of investment monitoring than in the past. We noted that there was a trend towards greater risk management tools through companies such as PwC and Blackrock.^[12]
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We also noted that there may be a thaw around how advisors collaborate driven by sustainability concerns. As we noted, federal government guidelines on collaboration were last updated more than 20 years ago. Financial advisors have responded to this change by finding new marketing products, such as coaching or collaboration.^[13]
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Lastly, we noted a trend in FINRA’s report of its registered agents. This included a restoration in the number of registered agents (correcting for a mild decrease during the pandemic); a peak in the number of investment advisor only registrants with FINRA; a trend that there may be more new advisors than those retiring; and a slow decrease in the number of firms registered with FINRA, possibly indicating consolidation in the market.^[14]
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Things to Watch For

Two cases were heard in the Supreme Court’s fall 2024 agenda that could affect an advisor’s practice. These are Wisconsin Bell v. US, Ex Rel Heath and San Francisco v. EPA.^[15] Wisconsin Bell involves, potentially, the authority and scope of a private entity that oversees an industry. This could affect FINRA’s powers, depending on the outcome of the case. The second case, San Franscisco v. EPA tracks more closely with Jarksey. There, the court will rule on whether the EPA can impose non-specific prohibitions on permits and impose fines for violation of those permits. ‍If the Court decided that the EPA overstepped its regulatory authority and instead was required to be more detailed, then it could be that more agencies, such as those regulating financial advisors, might need to be more specific in their overly broad regulations as well. This could, in an overly broad manner, provide another strike against an overbroad fiduciary duty rule. Additionally, it’s worth noting that many of the protections around cybersecurity (on PII) are modeled after HIPAA, which has notoriously vague standards. That could mean a ruling by the Supreme Court against the EPA (and its vague regulations) could change how regulatory agencies such as the SEC and DOL approach cybersecurity regulations.
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In 2024, we noted that a leadership change at the SEC had changed its enforcement agenda, specifically towards fraud cases (perhaps in anticipation of a positive ruling in the Facebook case noted above). It was thought that this enforcement change might signal tighter enforcement of investment statements.^[16] However, it is now clear that there will be a change in leadership from SEC Chair Gensler to a Trump nominee. At present, that nominee is Paul Atkins, who was Chair of the SEC during the Bush administration for six years (2002 to 2008). Atkins has expressed an interest in changing the SEC’s ESG rule as well as favorably changing the agency’s approach on cryptocurrency.
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As to other trends we think are worth watching, in 2024 we noted the rise, and potential risk, of so called “Finfluencers.” These are self-appointed experts who discuss financial basics on TikTok, YouTube, and Instagram. This poses challenge in monitoring what younger generations, such as GenZ are learning through these unregulated communication channels.^[17]

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^[1] https://www.bcgbenefits.com/blog/supreme-court-considers-chevron-change

^[2] https://www.bcgbenefits.com/blog/loper-bright

^[3] https://www.bcgbenefits.com/blog/independent-contract-rules

^[4] https://www.bcgbenefits.com/blog/ebsa-enforcement-data

^[5] https://www.bcgbenefits.com/blog/unauthorized-ai-at-work

^[6] https://www.bcgbenefits.com/blog/marketing-meps

^[7] https://www.bcgbenefits.com/blog/feelings-about-annuities

^[8] https://www.bcgbenefits.com/blog/family-financial-plans

^[9] https://www.bcgbenefits.com/blog/talking-about-aging

^[10] https://www.bcgbenefits.com/blog/gender-diversity-in-investment

^[11] https://www.bcgbenefits.com/blog/unauthorized-ai-at-work

^[12] https://www.bcgbenefits.com/blog/managing-investment-risk

^[13] https://www.bcgbenefits.com/blog/anti-trust-regulations

^[14] https://www.bcgbenefits.com/blog/finra-data

^[15] https://www.bcgbenefits.com/blog/eyes-on-the-court

^[16] https://www.bcgbenefits.com/blog/sec-leadership-change

^[17] https://www.bcgbenefits.com/blog/finfluencer-risks

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‍These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.

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