As we look back on 2025, many of the most meaningful conversations we had weren’t about performance alone, they were about how investment firms are building their businesses in an environment defined by change.
Across investment operations, fund administration, and compliance, firms faced different challenges depending on where they were in their lifecycle and what products they offered. But taken together, those conversations revealed something consistent: decisions made today around technology, service providers, and operating models will shape firms far longer than they may expect.
Here are a few of the themes that stood out most this year.
Investment Operations: Technology Is Driving the Conversation, But It Can’t Stand Alone
Within investment operations, 2025 was defined by technology disruption.
Artificial intelligence, automation, and new technology platforms dominated conversations as firms evaluated both their current tech stacks and a growing number of new market entrants. Many teams felt pressure to modernize quickly, whether to improve efficiency, reduce manual work, or keep pace with peers adopting newer tools.
What became clear, however, is that technology alone doesn’t solve operational challenges.
The most productive conversations weren’t simply about replacing systems or adding AI capabilities. They were about reimagining investment operations more holistically, with technology as one component of a three-part equation that also includes people and process.
Firms that approached modernization thoughtfully asked broader questions:
- Do our processes actually support the technology we’re implementing?
- Do our teams have the right expertise and time to learn to operate in a more automated environment?
- Are we solving root causes, or just layering new tools on top of old workflows?
The takeaway from 2025 was simple but important: firms shouldn’t have a technology conversation in a silo. As investment operations evolve, technology decisions need to be made in the context of the operating model as a whole.
Fund Administration: Choosing Partners That Can Grow With the Fund
As firms launched new products in 2025, whether first-time funds or additional vehicles from established managers, one theme consistently shaped the most thoughtful conversations: partner selection needs to align with the long-term growth plan of the fund, not just its starting point.
At launch, it can be tempting to focus on speed and cost. But the reality is that early decisions around fund administration and compliance often stay in place for the long-term. The question isn’t simply whether a provider can support the fund during its launch, it’s whether they can support the fund through multiple phases of its lifecycle.
That means thinking ahead:
- How do we expect this fund to grow?
- What does “institutional” look like for us in two, three, or five years?
- How will our investor base, reporting needs, and operational complexity evolve?
Too often, firms with ambitious growth plans select low-cost providers whose service models aren’t designed to support the level of sophistication required as the fund scales. Just as frequently, smaller or newer funds engage large, highly institutional providers only to find themselves deprioritized, paying for a brand name without receiving the level of service they deserve.
The point is not that one model is right or wrong. It’s that fund administration is not a race to the bottom on price, nor should it be driven solely by brand recognition. The most effective partnerships are those that are right-sized, aligned with the fund’s business plan, and capable of growing alongside it.
When fund administration and compliance partners are selected with this long-term view in mind, firms are better positioned to scale without disruption, avoiding costly transitions and operational strain later in the fund’s lifecycle.
Compliance: Everyday Responsibility, Heightened Uncertainty
Compliance has always been part of an investment advisor’s day-to-day reality. But in 2025, it became even more front of mind as firms navigated an environment marked by regulatory uncertainty and change.
The presence of a new administration, looming compliance deadlines, and a government shutdown in the fall all contributed to regulatory unpredictability during the year. Firms were required to stay on top of rulemaking developments, which included concrete deadlines, such Reg S-P’s December 4 date for large advisers, and pulled back deadlines, such as those regarding the AML Rule and Form SHO.
Compliance challenges often ran alongside rulemaking hurdles, compounded by the pressure to innovate and remain competitive. At the center of this innovation push is the adoption of AI—bringing both significant benefits and complex risks. Many compliance officers faced mounting pressure from advisers eager to leverage AI’s ability to streamline advisory, operational, and even compliance tasks. Yet, this enthusiasm created a new challenge: understanding every area where AI might be embedded within the firm, including through third-party vendors. Compliance officers have been challenged with ensuring their vendors do not expose client personal information or allow such data to be used to train AI models. Protecting sensitive information and managing vendor-related risks remain critical responsibilities in this evolving landscape.
These compliance challenges proved advisers are most protected when the compliance services they receive are proactive rather than reactive. Anticipation, understanding how regulatory changes could impact an adviser’s business, and close collaboration with advisers were all critical steps in supporting advisers’ compliance programs.
In this environment, experience mattered. Firms benefited from working with compliance professionals who had navigated multiple regulatory cycles and could provide context, foresight, and practical guidance, not just rule interpretation after the fact.
As compliance continues to evolve, 2025 reinforced a familiar truth: compliance works best when it is woven into everyday operations, supported by consistent processes, informed judgment, and the ability to adapt as regulatory conditions change.
The Common Thread: People, Process, and Technology
While each vertical told a different story, one overarching theme connected them all.
Whether firms were evaluating AI in investment operations, choosing a fund administrator for a new launch, or navigating regulatory uncertainty, the most effective decisions were made through a balanced lens of people, process, and technology.
Technology can enable scale.
Processes create consistency and control.
People bring judgment, experience, and accountability.
Focusing on one without the others often leads to short-term gains, and long-term challenges.
Looking Ahead
As firms move into 2026, the pressure to modernize, scale, and adapt isn’t going away. But the conversations we had in 2025 reinforced an important perspective: the goal isn’t change for its own sake. It’s building operating models that are resilient, right-sized, and prepared for what comes next.
At STP Investment Services and ComplianceAdvisor, the insights we shared throughout the year were shaped by these conversations, and by the belief that thoughtful decisions today create stronger outcomes tomorrow.
We look forward to continuing those discussions in the year ahead.
