Experts at UK investment manager Schroders discuss the results of their latest annual UK Financial Advisor Survey 2025, highlighting the need to boost allocations to alternatives and emerging markets.

A new survey by Schroders reveals that 36 per cent of financial advisors have increased their exposure to alternatives and 32 per cent to emerging markets over the past 12 months. It also indicates that this trend will continue into next year.

The survey covered the views of 221 UK financial advisors over the period October to November 2025.

Speaking at a media event in London yesterday, Stuart Podmore, investment propositions director at Schroders, highlighted an increased allocation to alternatives such as real estate and gold. “Emerging markets are also at the top of the tree, with the weakened dollar benefiting emerging market equities. Valuations are more attractive,” Podmore said. The firm is slightly overweight in emerging markets.

A number of wealth managers have come out recently in favour of emerging markets and Asia this year, for instance Aberdeen Investments, Paris-based Amundi, Carmignac and Indosuez, as well as GIB Asset Management and Franklin Templeton. See more here and here.

“UK equities have also been unloved. There is renewed confidence in UK equities and valuations are supportive there,” Podmore continued.  

Overall, the survey shows that the equity market has softened, as optimism has cooled since the 2024 highs and concerns over the artificial intelligence-driven bubble weighing on developed markets. Thirty-one per cent of advisors expect lower-than-average equity returns over the next five years compared with 14 per cent who expect higher returns, the survey shows. Bond sentiment has improved from 2022, but has moderated slightly over the past year, with 19 per cent anticipating lower bond market returns.

The survey also examined fiscal debt sustainability, with results demonstrating a majority of advisors expecting significant disruption from rising public debt burdens.

Podmore emphasised that volatility concerns remain elevated, with expectations for higher market volatility spiking amid geopolitical risks and policy uncertainty.

However, expectations for sustained high inflation have fallen since 2022, although a recent uptick in advisors expecting inflation to rise signals some renewed caution. Consensus leans towards lower interest rates over the next five years, but some uncertainty persists.

Capital loss is still the number one concern for 51 per cent of advisors' clients, the survey reveals. Although a number of wealth managers still favour ESG investing for the long-term, Jamie Fowler, head of UK wealth at Schroders, said yesterday that advisors report explicit client demand for ESG integration is limited and has declined from its peak in 2021. Eighty-six per cent of advisors said fewer than a quarter of their clients specify ESG requirements, a proportion that has risen again after dipping during the post-pandemic surge in interest.

Fowler highlighted at the media event that interest among clients in sustainable investing has declined steadily over the past four years. In late 2021, strong momentum was evident, but this trend has reversed, he said.

Ahead of the UK Autumn Budget on November 26, when tax hikes and changes to gifting are expected, inheritance tax planning has been a priority, with 27 per cent of advisors reporting that they have reviewed estate planning strategies with their clients.

Regulation is also still a priority for advisors, with 40 per cent identifying it as their primary concern, although this has fallen from 57 per cent in November 2024.

In addition, confidence in AI’s potential has grown, the survey shows, with three quarters of advisors viewing it as an opportunity. The proportion of advisors who have already implemented some form of AI-based technology applications to refine their advice has jumped from 21 per cent in November 2024 to 48 per cent in November 2025, the survey reveals. Advisors see efficiency and automation as the top benefit of AI, ranked first by 70 per cent of respondents.