By Tangwena Nelson, MD, Head of Asset & Wealth Managers, Lloyds

What were the defining themes in wealth management over the past year?

The past year saw private markets move from the margins to the mainstream. Wealth management clients are increasing allocations to private credit, infrastructure and sustainable assets, driven by the need for enhanced yield and greater portfolio diversification in a changing interest rate environment. At the same time, family offices continued to behave more like institutional investors, requiring direct access, transparency and stronger execution capability rather than off-the-shelf products.

A second defining theme has been the growing alignment between capital and purpose. Clients are increasingly seeking opportunities that combine attractive financial returns with measurable social and environmental impact, particularly in areas such as sustainable infrastructure, affordable housing and the transition to a low-carbon economy. Underpinning these shifts is also a move away from universal distribution toward more selective, partnership-led relationships, with greater emphasis on sustainable value creation.

What key lessons from this year will be most important for the industry going forward?

This year reinforced that access and alignment now matter more than just product volume. As private markets become a core part of portfolios, clients are no longer satisfied with generic fund exposure; they want direct access, transparency and the ability to shape investments around their objectives. The traditional distribution model is giving way to origination-led approaches, where depth of expertise and execution capability increasingly differentiate providers. As a result, the focus is increasingly centred on strategically aligned relationships and long-term outcomes, rather than short-term flows.

Trends and Industry Dynamics

How are client demands evolving, particularly around sustainability, alternatives, and digital solutions?

Client demand is increasingly centred on private and alternative assets, with strong appetite for private credit, infrastructure, sustainable assets, real estate and direct lending opportunities. Private markets are no longer seen as niche and are now becoming core components of portfolios. At the same time, clients are placing greater emphasis on investments that deliver both financial returns and positive social or environmental outcomes, such as sustainable infrastructure, affordable housing and projects that support the transition to a low-carbon economy. UK clients in particular are focused on domestic opportunities that contribute to economic resilience.

As with the wider industry, technology now plays a central role in how we serve clients. Demand for faster, more agile and efficient servicing has been building for years, and we continue to invest in digital capabilities that make client interactions simpler, more secure and more responsive.

What emerging trends are likely to impact the financial services industry?

One of the most significant emerging trends is the increasing institutionalisation of wealth managers and family offices. Their expectations around access, transparency and due diligence are converging with those of traditional institutional investors, and they are becoming much more focused on how investment opportunities are originated and executed.

Alongside this, we expect consolidation in the wealth management sector to accelerate over the next 24 months. Both corporate-to-corporate mergers and private-equity-backed roll-ups are gathering pace, driven by the search for scale, operating efficiency and more diversified revenue streams. As firms grow larger and more integrated, they will increasingly look for differentiated sources of private-market access and clearer alignment with long-term client objectives.

We are also seeing a continued shift toward direct or bespoke exposure to private markets, reflecting clients’ desire for more control and clearer alignment of interest. Over time, these forces – institutionalisation, consolidation and demand for direct access – may reinforce an industry split between scale-driven platforms offering comprehensive digital solutions, and specialist managers providing deep expertise and differentiated origination.

Looking Ahead: 2026 and Beyond

What macroeconomic or market scenarios are top-of-mind for 2026?

The outlook is shaped by a cautiously constructive view on global growth, along with the stabilisation of inflation and interest rates. Asset and wealth managers are focused on how a more balanced rate backdrop could support both income and growth assets, while ongoing innovation across markets and products continues to expand the investable opportunity set. The prevailing focus is on building resilient portfolios that can benefit from improving market breadth, new sources of yield and long-term structural growth themes.

Which investment themes, sectors, or strategies do you expect to gain traction next year?

Areas such as sustainable infrastructure, affordable housing and projects supporting the low-carbon transition are expected to remain key areas of focus, particularly for UK-based investors seeking to support domestic economic resilience alongside attractive long-term returns.

How do you see wealth management evolving over the next 3–5 years to meet changing client expectations and industry dynamics?

Wealth management will increasingly mirror institutional models, with clients expecting more sophisticated access, greater transparency and stronger execution. Origination-led approaches are likely to become more embedded, with a growing emphasis on tailored, direct investment opportunities aligned to specific client priorities.

At the same time, the coming intergenerational wealth transfer is forcing a rethink of how firms engage, acquire and retain clients. Established institutions are reassessing their propositions to better resonate with younger investors, while newer entrants are seeking to attract this audience by way of digital-first experiences, simplified journeys and elements of gamification.

As strategies and target demographics evolve, so too does the capital required to support them. Greater investment in technology, product development and customer experience is increasing the need for growth funding across the sector.

With firms expected to move further away from transactional distribution toward deeper client relationships based on long-term strategic alignment, the industry is likely to evolve along two distinct paths: large-scale, technology-enabled platforms delivering comprehensive solutions, and specialist firms offering highly differentiated expertise.