Wealth portfolio allocations to private markets are set to stagnate over the next two to three years, with growth being constrained by cost, liquidity, and transparency concerns, according to a report from the Thinking Ahead Institute (TAI).

Its Global Wealth Study 2025, which surveyed 250 professionals across 151 wealth firms in 27 countries, highlighted that the sector was in transition, driven by demographic shifts, technological disruption, and a renewed focus on values-based investing.

While innovative private market solutions for wealth clients, such as Long-Term Asset Funds, had been developed, the TAI found that wealth firms did not expect this to result in any significant change in overall client portfolio allocations over the next two to three years.

In the UK, limited liquidity was the top barrier to faster take up of private markets allocations, while high fees and a lack of transparency were also cited as key challenges.

Amid this complexity, the report noted that wealth firms allocating to private markets tended to outsource allocation decisions to external specialists.

Almost half (46 per cent) of wealth firms largely or entirely outsourced their private markets allocations, compared to 27 per cent and 23 per cent of respondents for listed bonds and equities respectively.

High net worth individuals (HNWI) in the UK allocated 24 per cent to private markets, compared to 34 per cent in Continental Europe and 40 per cent in Asia Pacific, and had higher allocations to public equities (54 per cent).

Investors were also expecting a shift in asset allocations among geographies over the next few years, with 84 per cent to target Europe, 78 per cent to increase allocations to Asia Pacific, and 63 per cent to have greater allocations in North America.

Business ownership, inherited assets, and financial investments were the top three sources of wealth globally, with 77 per cent of clients’ wealth in the UK sourced through inherited assets.

With inheritance shifting the attitudes of wealth clients, the TAI said that wealth firms were reporting a need to tailor their services to support intergenerational transfer, tax efficiency, and long-term portfolio stability.

Resources and strategic support were found the be the most valuable services for managing intergenerational transfer, including tax-efficient investment structures (54 per cent); portfolio design and asset allocation (43 per cent); and customised intergenerational wealth strategies (34 per cent).

The TAI stated that, given the limitations of wealth managers to resource this, it was becoming increasingly important for firms to evolve their services, drawing upon external support where possible.

Although wealth accumulation remained a dominant theme, firms were increasingly recognising the importance of preserving capital, while clients were showing greater interest in aligning with their personal values and expecting wealth firms to offer tailored advice, digital tools, and strategic support.

“The wealth firm of tomorrow must balance stewardship and growth, adopting a holistic approach that both preserves inherited and accumulated assets while also supporting clients through their entrepreneurial journey,” commented TAI associate director, Andrea Caloisi.

“While investing/saving ranks highest, wealthy clients also identify retirement, cashflow, inheritance, and family support as major priorities. These findings point to a more holistic view of wealth management, where life events and family goals matter.

“However, regional differences as well as the size of wealth particularly capture the difference in approach towards investment, with liquidity issues remaining a top concern in private markets investment, likely influenced by several high-profile cases in recent years.”

WTW head of GB retail and wealth investments, Ben Leach, added: “As the wealth market grows and evolves, it is increasingly important for wealth management firms to understand the demands of the changing demographics, the drivers of investment choices, impact of barriers to access in private markets, sources of wealth, and how each factor varies regionally, to tailor their services effectively.

“For wealth firms, performance and cost remain the top drivers for investment approach. Strategic asset allocation and long-term investing prevail, as portfolios remain equity-heavy, with modest shifts toward private markets and alternatives.

“On the flip side, in the next two to three years, wealth management firms are prioritising strategic expansion to meet client expectations, service innovation, and deepening engagement.”

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