TIME quizzed 200 financial advisers, wealth managers, discretionary fund managers, fund selectors and investment analysts on their expectations for the coming year.

The researchers found 76% of those surveyed expect to increase their allocation to real estate over the next 12 months, and 74% said the same thing about infrastructure.

In terms of the reasoning, a desire to de-risk portfolios through diversification was mentioned by two thirds of those questioned (67.5%), an increased focus on ESG by 60.5% and a desire for secure income streams was referred to by 44.5% of those taking part.

A somewhat bearish outlook on markets generally has also played a role in forming these plans.

The researchers found 70% of the professionals questioned predicted a challenging economic climate and investment environment this year, and said they do not expect conditions to improve for at least 12 months.

See also: What does 2024 hold in store for the wealth management industry?

Andrew Gill, manager of TIME:UK Infrastructure Income, said: “In the short term, we share the view of advisers that uncertainty and volatility is likely to persist.

“However, we are seeing values stabilise in most real estate and infrastructure sectors and the reduction in bond yields seen in late 2023 should support this further. Traditionally, reducing bond yields have been a catalyst for greater investor interest in real assets, making conditions more supportive for a return to growth.

“We have also seen a significant change in market conditions and expectations with UK inflation dropping materially,” Gill added. “This could lead to earlier rates cuts than previously expected with forecasters, such as Capital Economics, moving forward their expectations for central bank rate cuts.

See also: Premier Miton’s David Jane: Reframing income as an output rather than a style

“With economic growth likely to remain subdued, sectors with robust and growing cash flows, such as real estate and infrastructure, are likely to outperform over the long term. Growing cash flows should also continue to fuel income and dividend increases in most real asset sectors.”

The research took in responses from 200 UK wealth managers, financial advisers, discretionary fund managers, fund selectors and investment analysts.

Time found that 78% of respondents expect to increase allocation to alternatives over the next 12 months.

However, the research found that there are still challenges to increasing allocations, including investment strategy choice, limited knowledge of the alts market and a lack of expert alternatives fund managers.

To read more on this topic, visit: Brits continue to flock to alternative investments

Some 60% of respondents said investment strategy was a key factor in selecting an alternatives fund manager, while 47% placed emphasis on expertise across asset classes and regions. 43% highlighted an ESG approach as an important factor.

In terms of client portfolios, 26% of respondents are currently targeting a 16-20% allocation to alternatives, while 35% are targeting 11-15%. Meanwhile, 29% are currently targeting an alternatives allocation in the 6-10% range.

Henny Dovland, business development director at Time Investments said: “Our research shows that wealth managers, advisers and investment professionals are already allocating significant proportions of client portfolios to alternative investments, with targets set to increase.

“This is largely driven by the prevailing economic conditions and more conventional asset classes such as equities proving highly volatile. Alternatives provide diversification and attractive yields as investors seek to weather the storm.”

This article first appeared on our sister publication Portfolio Adviser.

Its report found that although Millennials and Generation Z earning over £50,000 ($63,466,€ 58,128) per annum have a high propensity to seek financial advice, many will switch advisers following the inheritance of managed assets, putting assets under management (AuM) at risk.

The research revealed that 60% of Millennials and Generation Z surveyed are expecting an inheritance from their parents or other family members.

These sums are significant with 19% expecting to receive more than £600,000, 14% between £400,000 and £600,000, and one-in-five expecting to inherit between £200,000 and £400,000. Some 16% anticipate an inheritance of £100,000 to £200,000 and 17% expect to inherit up to £100,000.

However, the findings also reveal a significant challenge to advisers as many of those set to inherit do not have a relationship with the advisers who currently manage these assets.

Just under half (47.5%) do have a relationship with the adviser used by the family members they are expecting to receive an inheritance from.

Positively, some 46% of those that don’t have a relationship said they would continue to use the same adviser when the wealth is transferred to them, compared to only 28% who said they won’t use them. A further 26% said they don’t know who they will use, suggesting they are open-minded either way, presenting an open-door opportunity for advisers to make them clients.

More concerningly, the proportion of inherited assets this age group is likely to leave with the same adviser is low. One fifth said they wouldn’t leave any assets with the adviser and just 4% said they would leave all the assets with them.

Loss of AuM

Tom Mullard, business line director for tax at Time Investments, said: “Our report shows that Generation Z and Millennials earning over £50,000 per annum have an eye to the future and are actively engaged in saving and long-term financial and inheritance planning. They are financially savvy but also very much open to advice.

“Almost half (56%) are already using a financial adviser to help them on this journey, seeking guidance on different aspects of their finances.

“However, the findings also clearly show that at the point of intergenerational wealth transfer, there are gaps in interactions that the adviser community needs to address to prevent the potential loss of significant AuM. Here, engagement is key and finding new ways of making advice accessible, relevant and ensuring it adds value is crucial.”

The international savings and investments business has appointed Clive Bolton as chief executive of M&G Life Insurance.

He joins from LV=, where he is currently managing director of protection, savings and retirement.

Aviva Investors

The global asset management business of Aviva has appointed Jill Barber as global head of distribution.

She will join the business later this year, subject to regulatory approval.

Barber will join from GAM Investments, where she has held the role of global head of institutional solutions since November 2020.

She will succeed Louise Kay, who has decided to retire at the end of this year after three decades in the investment industry.

Kay will continue to lead the distribution function until Barber’s arrival.

Time Investments

The tax-efficient investment solution specialist has named Tom Mullard as business line director (Tax).

Prior to joining Time, Mullard was at Downing for over 12 years, where he was a director of the product team.

Pinnacle

The investment management group has recruited Michael Putica as managing director for the Americas.

Prior to joining Pinnacle, he was head of sales for the Americas at State Street Global Markets’ portfolio solutions business.

Standard Life

The Phoenix Group subsidiary has appointed Amy Madden to the newly created role of customer office director.

She joins Standard Life from Equiniti, where she most recently held the role of global chief customer officer.

Close Brothers Asset Management (CBAM)

Gary Callow has joined as senior investment director based in Birmingham.

He previously held roles at Barclays Wealth and Investec.

Over 1,000 Brits were surveyed and the research also found of those who do have a Will, 43% have not updated it since it was first written.

Furthermore, of those who have recently lost a partner or spouse, 27% have yet to update their Will and 24% don’t have one in place at all.

Having an up-to-date Will is the most basic tool in the wealth-transfer process, because it creates a clear record of the beneficiaries of an individual’s estate, whether this is made up of investments, property, or valuable items such as jewellery or art.

If an individual dies without a Will, or a Will is found to be invalid, the estate will be wound up using the laws of intestate succession, which will determine who is entitled to benefit from an estate. This process can cause delays, administrative problems, and heartache for loved ones at a difficult time.

Henny Dovland, Time Investments’ estate planning and IHT technical specialist, said: “Having a Will and an estate plan means that individuals and families can manage the transfer of wealth more effectively and ensure they don’t pay more IHT than is necessary.

“Estate planning can be complex, so I would urge those with larger estates to seek advice as there are tools, such as business relief, which can be used to help reduce the tax burden.”

The importance of IHT planning is sky high as HM Revenue & Customs recently announced receipts between April and December 2022 totalled £5.3bn ($6.5bn, €6bn) – around £700m higher than the same period a year prior.