Investors are transferring money out of their UK assets to the US and Europe, triggered by Brexit that remains their single biggest concern.
The findings are from a survey by British fund manager Schroders, which polled 130 UK advisers.
The study found 94% of clients raising the topic of Brexit with their financial advisers.
Moreover, Brexit-related uncertainties led to money movement out of the UK by 40% of clients.
This year, 74% of the advisers reported a rise in asset allocations to the US, in line with last year’s figure.
Meanwhile, 22% of the advisers reported an increase in asset allocations to Europe versus 52% in 2018.
In terms of asset allocation exposure, the biggest decrease was reported in government bonds with 28% of the advisers citing a reduction.
On the other hand, 41% of the advisers said that they plan to raise their allocation to UK equities over the coming 12 months.
Apart from Brexit, other key concerns cited by the respondents include geopolitics, low-interest rates, global recession, as well as equity market correction.
The study also highlighted the rising importance of ESG, with 43% of the advisers saying that they consider ESG factors in fund selection.
Also, 76% of the advisers opined that disruption from factors such as climate change will increase over the next decade.
Schroders head of UK intermediary Philip Middleton said: “As we saw in the 2018 survey, the uncertainty of Brexit remains a prevailing concern for investors. However, this year’s data gives us reason to be cautiously optimistic on the outlook for the UK.
“Whilst 40% of investors have moved out of UK assets, capital looks set to be deployed back into UK equities with 41% of advisers expecting to increase allocations in the next 12 months.
“As concern has built in 2019 about the ongoing climate emergency, our survey suggests that awareness of ESG factors among investors is rising and is fuelling conversations with advisers.”