Nearly a quarter (23%) of UK advisers have responded to heightened market uncertainty and volatility by increasing actively managed investment allocations.
The latest Schroders UK Financial Adviser Pulse Survey found that only 9% of advisers has moved towards passive strategies.
The research showed that income has risen up the agenda, with nearly one in four (23%) of advisers reporting increased client demand for higher-income investments. That's against a backdrop where economic and market expectations have shifted materially.
Almost two-thirds, 65%, of advisers said they now expected higher inflation over the next five years, up sharply from 31% recorded in November 2025, while almost half, 46%, anticipate higher interest rates versus 17% expecting lower rates.
Geopolitical disruption expectations have rebounded to 66%, though they remain below the 77% peak recorded at this time last year, said Schroders. In response, more than half, 51%, of advisers said they were actively adjusting client portfolios, focusing on defensive repositioning, with 28% moving into cash.
Client sentiment has also shifted decisively towards bearishness: 39% of advisers now report bearish clients versus 17% bullish, compared with 25% and 28% respectively in November 2025.
Advisers are also responding by broadening allocations, according to the survey. Some 44% said they were exploring alternatives such as gold, active ETFs and Long-Term Asset Funds (LTAFs), indicating a transition from niche to mainstream in adviser thinking.
Client concerns are being shaped not only by geopolitics but also by tax policy. Although capital loss (36%) and geopolitical risk (32%) were identified by the survey as the top two client concerns, tax also emerged as a significant issue, cited as the number one concern by 16% of advisers.
That appears to be driven by concerns over plans to make pensions subject to inheritance tax from 2027.
Over half of advisers (52%) reported clients were very concerned and overall concern is near-universal (99%), with just 1% saying clients were not concerned at all. Nearly a third, 31%, of advisers expected that more than half of their client base would require estate-planning changes as a result.
Despite the pressures, adviser confidence in business prospects remains strong. An overwhelming 83% of advisers said they expected their client base to grow over the next 12 months and, looking ahead, it is tax and estate planning that stands out as the leading growth opportunity over the next two to three years.
However, advisers continue to highlight structural barriers to serving smaller clients. Nearly nine in ten, (88%), said that regulatory and cost pressures make it harder to serve lower-value clients, with over half reporting a significant impact, and a quarter saying they were actively segmenting and off-boarding some clients as a result.
On technology, the survey found that digital or tech-enabled advice solutions were already being used or actively explored by 41% of advisers to better engage and serve next-generation clients.
Adoption of AI continues to accelerate, with 51% of advisers now using AI tools within their advice process (up from 21% in November 2024) and a further 24% expecting to incorporate AI within the next 12 months - suggesting three-quarters will be AI-enabled by mid-2027.
• The Schroders UK Financial Adviser Survey was launched in 2009, with the Pulse Survey introduced in 2022. The latest survey was conducted between 30 April and 13 May among 212 advisers.