The UK government’s plans to boost retail investment will drive up client concerns about market volatility, research from Wesleyan suggests.
According to a survey of 300 advisers, the vast majority (92%) believe investment markets will be more volatile in 2026 with 84% suspecting the performance of their clients' investments is under threat due to market volatility.
The UK government's push to build a stronger culture of retail investing in the UK will make client concerns around market volatility a bigger issue, 82% of advisers predicted.
Meanwhile, 45% of advisers expect between 20% and 40% of their clients to be put off investing in growth assets such as equities, bonds or property while 45% of advisers also expect most of their clients nearing retirement to postpone or change their retirement plans as a result.
James Tothill, investment specialist at Wesleyan Financial Services, said: “Market volatility is set to be a defining concern for clients in 2026, and with the government encouraging more people to invest, advisers will potentially need to help a broader base of people to understand and navigate these conditions.
Tothill added that alongside portfolio management, the key will be to help clients maintain their investment discipline and recognise that volatility comes with investing in growth assets.
With a focus on client communication, 60% of advisers said they are planning to discuss what is driving the volatility, what the future outlook could be and what it means for their clients’ money and goals.
The survey found 48% are looking for diversification opportunities, such as commodities or private equity while the same proportion will look at investments in a smoothed fund, which actuarially adjusts for market volatility to smooth investment returns. A further 41% will advise clients to de-invest from certain sectors or markets.
Tothill added: “We're seeing growing adviser interest in smoothed funds as a way to help specific client segments manage volatility without sacrificing long-term growth potential.
“Smoothing offers a way to stay invested in growth assets while avoiding the emotional and financial impact of short-term market swings, whether that's helping clients maintain discipline during uncertain periods or protecting those who simply can't afford to see significant portfolio fluctuations at critical points in their financial journey.”
