Chris’s Take on Investment Trends

In the space of just a week, we’ve seen several global shifts that are already shaping adviser conversations and client behaviour. 

Reports of a sharp rise in clients taking tax-free lump sums ahead of the Budget reflect concern that pension tax advantages may be reviewed. Even without confirmed policy changes, the possibility is prompting advisers to focus more on forward planning and reassurance.

At the same time, equity market volatility - particularly around AI-linked valuations - has brought the sustainability of growth allocations back into view. Political signalling in the US and movement in the UK gilt curve are re-introducing diversification and duration into discussions. And while expectations of earlier rate cuts are rising, the Bank of England’s steady tone this morning suggests any shift will be gradual rather than sudden.

In this fast-moving environment, advisers are gravitating toward messages that are balanced, measured and grounded in real decision-making across portfolios, retirement plans and product selection.

There is clear demand for content that helps advisers turn these signals into practical, client-ready conversations, offering guidance on possible scenarios, rather than definitive forecasts. That type of framing is likely to drive stronger engagement over the coming weeks.

Chris’s Take on Investment Trends

• Equities remain the dominant asset class by AUM, with over £140.5bn under management, but have experienced net outflows of nearly £500m, indicating some adviser repositioning away from risk assets.
  
  
• Mixed Asset sectors remain relatively stable, with £6.2bn in gross flows and £37m net inflows. However, net growth is increasingly being redirected towards Model Portfolio Services (MPS) - a trend we’re actively tracking across adviser firms and platform flows.
  
  
• Fixed Interest continues to attract strong flows, with £7.3bn in gross flows and £1.7bn in net inflows, as advisers lean into income strategies and lower-volatility assets.
  
  
• Specialist sectors posted £103m in net outflows, suggesting advisers are reducing exposure to niche or higher-risk areas.
  
  
• Property saw £228m in net inflows, the strongest relative to gross flows, indicating selective re-entry into real assets.
  
  
• Cash funds hold £3.6bn in AUM, with £98m in net inflows this quarter. Whilst modest, this reflects ongoing adviser caution and highlights the significant opportunity for providers, when interest rates begin to fall and cash is redeployed.

Chris’s Take on the Trends

Each month, Chris, our resident data expert, will share his observations on adviser investment behaviour and what it might signal next.

Is Adviser sentiment turning a corner?

UK IA Sector Flows: Feb–Jul 2025. Panacea’s latest analysis of on-platform net flows* shows advisers reallocating with more confidence, while still favouring a cautious stance.

Panacea’s adviser community represents an impressive 75% of all on-platform net flows across IA sectors over the period.

• +£6.91bn in net inflows across all IA sectors over six months.
• July was the strongest month (£1.6bn inflows), following softer activity in April (£699m).
• Global Equity and North America led inflows (+£1.08bn and +£685m respectively).
• Defensive allocations held firm: Short-Term Money Market (+£525m) and UK Gilts (+£432m).
• Outflows concentrated in UK equity and balanced strategies, including IA UK All Companies (−13.8%) and Mixed Investment 20–60% (−9.8%).

Panacea’s adviser community continues to closely mirror broader market trends, providing a reliable lens on adviser behaviour and helping providers assess where demand is growing or waning.

* Source: On-Platform IA sector data by Finscape, February–July 2025. Analysis by Panacea Adviser.