What is the biggest threat to the wealth of UHNWs today? Unsurprisingly, against the backdrop of conflict in the Middle East and uncertainty concerning oil supplies and other trade in this globally strategic region, geopolitics emerges as the most significant risk factor in the 2026 Spear’s Wealth Management Survey. Some 46 per cent of respondents to our bellwether poll of bankers and wealth advisers put it top of their concerns for clients’ portfolios, as seen in the graph below.
The danger, according to Ross Elder of Lincoln Private Investment Office, is not merely volatility itself but the decisions clients make in response to it. ‘The real threat isn’t necessarily the geopolitical events and their impact on portfolio performance,’ he says. ‘The risk is clients attempting to time the market or selling their portfolio during periods of heightened volatility. History tells us that geopolitical events have had minimal impact on long-term investment performance.’
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Domestic tax and policy changes emerge as the second most significant threat, with some 23 per cent of respondents listing it as their top concern. Mark Goddard of Lombard Odier points to an accelerating trend among wealthy entrepreneurs: not just restructuring their affairs but reconsidering their futures in the UK altogether. ‘When entrepreneurs leave, they take tax revenues, job creation, mentorship and private capital for emerging businesses with them,’ he warns. The concern is compounded, as Naomi Rive of Highvern notes, by the manner in which change tends to arrive – abruptly, and with little consultation, ‘undermining years of planning and taking clients by surprise’.
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However, the UK is not alone in struggling to provide investors and globally mobile people with certainty about its tax regime. Italy, Switzerland and the US are among other blue-chip jurisdictions to have scared the horses in recent months, either with the prospect of significant changes or more concrete changes. In the US, California is proposing a one-off 5 percent wealth tax on residents worth more than $1 billion. Although this still has several hurdles to clear before becoming a reality, Google co-founders Eric Schmidt and Sergey Brin and PayPal and Palantir co-founder Peter Thiel have already left the state. And in March, Washington (one of nine US states without an income tax) passed a 9.9 per cent tax on personal income above $1 million per year from 2029.
If the threats are clear, so too is the response, at least in broad terms. When asked how they would counsel clients to adjust their exposure, advisers point towards commodities and digital assets, and away from private credit, as the graph below shows.
The case for reducing private credit exposure is, in part, tied to macro forces emerging from the threat landscape. Mike Winstanley of Bentley Reid explains that his ‘highest conviction view’ is that private credit ‘may face pressure over the next 12 months. If inflation proves sticky due to energy shocks and trade frictions, interest rates may remain higher for longer, which could tighten liquidity conditions and increase refinancing risk across parts of the private credit market’. It is a notable shift in sentiment for an asset class that has attracted enormous inflows in recent years on the promise of yield and stability. In 2000, private credit accounted for assets under management of $40 billion; by late 2025 that had grown to $3.5 trillion.
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On the opportunity side, Adam Brownlee of Coutts Family Office points to a broader reallocation already under way: ‘We see clients increasing exposure to diversifying alternatives such as hedge funds, commodities and selected digital assets, which can provide differentiated return streams alongside traditional equity allocations.’ With cash rates expected to decline gradually, he adds, the opportunity cost of sitting on liquidity is rising, pushing capital back into risk assets.
How those opportunities are captured will also rest on the structure, processes and incentives of the advisory firms themselves. The wealth management sector is itself in the midst of significant consolidation, and opinion is divided on what that means for clients.
Forty per cent of respondents said clients are likely to receive better service, value and outcomes as the sector consolidates, as seen in the graph below. The optimistic case that greater scale drives cost efficiency, which flows through to lower fees and better resources, is intuitive enough. But it rests on an assumption that the bespoke nature of wealth management survives the process intact, which is far from guaranteed.
Bandish Gudka of LGT points to a structural risk that is easily overlooked: ‘Having multiple advisers often dilutes the proposition and advice and reduces overall oversight. Is there a core adviser? Who is responsible for governance and intergenerational wealth transfer? Where multiple advisers add genuine value is in cross-border situations, where investment content and availability differ across jurisdictions.’
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The consolidation debate, in many ways, is inseparable from a broader question reshaping the industry: what happens when the impact of artificial intelligence becomes clearer. Almost a quarter of respondents say AI will result in a ‘meaningful shift’ in the wealth management sector, as shown in the graph below. But nearly half believe the change will be more pronounced, amounting either to a ‘significant transformation’ (20 per cent) or being ‘fundamentally transformative’ (29 per cent).
Helena Eaton of Bedrock sees a sector bifurcating along wealth brackets. At the lower ‘affluent’ end, much of the portfolio management may ultimately be automated; at the UHNW level, she expects something more nuanced: ‘A hybrid model where a human wealth manager will still play the key role, but will be increasingly relying on AI tools in many areas, such as portfolio construction, investment advice and family governance.’
What neither efficiency nor automation can easily replicate is judgement. As Omar Iqbal of Cazenove Capital puts it, in a world where investment management is becoming increasingly commoditised, ‘a firm’s advice proposition will become the biggest factor in differentiating wealth managers from each other.’ The advisers who thrive may be those who use AI to sharpen their thinking as opposed to outsourcing it.
The wall of worry, it turns out, has more than one face. The threats facing clients – geopolitical instability, domestic tax pressures, volatile markets – are well documented. But the industry charged with navigating those threats is itself in flux: consolidating, automating and redefining what it means to advise. For clients, the question is whether that transformation works in their favour.
This article first appeared in Spear’s Magazine Issue 99. Click here to subscribe
