New research from Wesleyan, a Birmingham-headquartered mutual, was released this week, revealing that UK financial advisors are bracing for increased market volatility in 2026.

The vast majority (92 per cent) of UK financial advisors believe that investment markets will be more volatile in 2026, driven by uncertainty over the global economy and the rate of UK inflation, according to a new survey released by Wesleyan.

The survey of 300 UK-based financial advisors was conducted by Censuswide on Wesleyan's behalf between 28 November and 4 December 2025.

Advisors expect uncertainty over the global economy (68 per cent), the rate of UK inflation (61 per cent) and Bank of England interest rate decisions (50 per cent) to be the most significant contributors to market volatility. This is together with new, intensified or enduring global conflicts (42 per cent) and a fall in global technology equities, including artificial intelligence companies (39 per cent).

More than four in five (82 per cent) advisors believe that the UK government's push to build a stronger culture of retail investing in the UK will make client concerns about market volatility a bigger issue.

Almost the same proportion (84 per cent) believe that the performance of their clients' investments is under threat due to market volatility next year. Meanwhile, more than two fifths (45 per cent) expect between 20 per cent and 40 per cent of their clients to be from deterred from nvesting in growth assets such as equities, bonds or property.

The threat is also affecting retirement plans, with more than two fifths (45 per cent) of advisors expecting most of their clients in or near retirement to postpone or change their retirement plans as a result.

“Market volatility is set to be a defining concern for clients in 2026, and with the government encouraging more people to invest, advisors will potentially need to help a broader base of people to understand and navigate these conditions,” James Tothill, investment specialist at Wesleyan Financial Services, said. “Beyond portfolio management, the key will be to help clients maintain their investment discipline and recognise that volatility comes with investing in growth assets.”

Wesleyan's research also reveals that advisors are deploying a range of strategies to help their clients manage market volatility in 2026. The most common approach is client communication, with six in 10 (60 per cent) advisors planning to discuss what is causing volatility, what the future outlook could be and what it means for their clients' money and goals.

Nearly half (48 per cent) said they will seek further diversification opportunities, such as commodities or private equity. The same proportion (48 per cent) said they will start or increase investments in a smoothed fund, which actuarially adjusts for market volatility to smooth investment returns. A further 41 per cent will advise clients to de-invest from certain sectors or markets.

“We're seeing growing advisor interest in smoothed funds as a way to help specific client segments manage volatility without sacrificing long-term growth potential,” Tothill added. “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.”