Financial advisers expect the push for greater retail investment in the UK to result in client concerns around market volatility becoming a bigger issue, according to Wesleyan Financial Services.

Wesleyan noted that advisers were anticipating increased market volatility in 2026, with concerns being driven by uncertainty in the global economy and inflation.

Almost all (92 per cent) advisers believed investment markets would be more volatile this year.

More than two thirds (68 per cent) cited uncertainty over the global economy as a key driver of volatility, while 61 per cent pointed to the rate of UK inflation and 50 per cent cited Bank of England interest rate decisions.

Other drivers highlighted by advisers were new, intensified or enduring global conflicts (42 per cent) and a fall in global technology equities, including AI companies (39 per cent).

There were concerns that the government’s push to build a stronger culture of retail investing in the UK would make client worries around volatility a bigger issue, with 82 per cent believing this would be the case.

Around the same proportion (84 per cent) felt the performance of their clients’ investments was under threat due to the anticipated market volatility next year.

Additionally, 45 per cent expected between 20 per cent and 40 per cent of their clients to be put off from investing in growth assets such as equities, bonds, or property.

These concerns were also affecting retirement plans, with 45 per cent of advisers expecting most of their clients at or near retirement to postpone or change retirement plans as a result.

Wesleyan Financial Services investment specialist, James Tothill, said market volatility was set to be a defining concern for clients in 2026, and advisers may need to help a broader base of people to understand and navigate these conditions due to the push for retail investment.

“Beyond portfolio management, the key will be to help clients maintain their investment discipline and recognise that volatility comes with investing in growth assets,” he added.

The research also found that advisers were utilising a range of strategies to support their clients with managing market volatility this year.

The most common approach was client communication, with 60 per cent of advisers planning to discuss what is driving volatility, what the future outlook can be, and what it means for their clients’ money and goals.

Nearly half (48 per cent) said they would seek further diversification opportunities, such as commodities or private equity, while the same proportion planned to start or increase investment in smoothed funds.

More than four in 10 (41 per cent) said they would advise clients to de-invest from certain sectors or markets.

“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,” Tothill stated.

“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.”

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