Wealth managers’ investment company allocation holds steady following two years of decline

Wealth managers’ share of investment companies held steady in 2025 following two years of decline, a report from the Association of Investment Companies (AIC) has revealed.

Firms in the wealth management sector held 24 per cent of investment company shares on behalf of their clients at the end of 2025, unchanged from the previous year.

Meanwhile, the value of their holdings increased from £49bn to £50bn over the same period.

Private investors’ share of investment companies increased from 26 per cent worth £55bn in 2024 to 27 per cent worth £57bn in 2025.

The AIC noted that £1 out of every £6 of investment company shares was held on Hargreaves Lansdown, Interactive Investor, or AJ Bell.

Institutions’ holdings of investment companies fell from 48 per cent to 46 per cent over the year, while the share represented by adviser platforms remained at 2 per cent.

The report was based on analysis of investment company holdings worth £187bn, 90 per cent of the total industry market capitalisation of £208bn, as at the end of December 2025, and excludes venture capital trusts (VCT).

UK investors held 74 per cent of investment company shares, with US investors holding 13 per cent.

However, when looking at investment companies investing in alternative assets, UK investors held just 58 per cent, while US investors held 23 per cent and Swiss investors held 3 per cent.

“During a tumultuous time for investment companies, it is good to see that wealth managers’ share of the industry has held steady and that private investors have continued increasing their share,” said AIC chief executive, Richard Stone.

“We are not quite at the point where every headwind is turning into a tailwind, but there are some positive signs, such as the narrowing of the discount from 19 per cent in 2023 to 11 per cent today, and the partial resolution of the cost disclosure issue that has been a cloud over the sector for some years.

“It is also interesting to see the foreign ownership of investment companies investing in alternative assets.

“This highlights what a UK success story this sector is with overseas investors coming to the UK market for exposure to asset classes such as infrastructure, renewable energy and private equity which are not as readily available through their domestic public markets.”

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