Portfolio strategies

Global wealth management investment survey 2023

We share how wealth managers are navigating asset allocation, overcoming operational challenges and meeting the long-term demand for sustainability.

Mercer’s 2023 Global wealth management investment survey seeks to advance discussion and collaboration around the asset allocation decisions, risk management and governance practices of wealth managers. This year’s study illustrates how wealth managers globally remain dedicated to delivering excellent client service. They continue to innovate, exploring new areas of investment to generate better risk-adjusted returns and help clients achieve their financial goals.

The economic backdrop of the past year has given wealth managers plenty to consider. According to our panel of nearly 100 financial intermediaries surveyed in 2023, investors expect their wealth managers to protect them from the impact of higher inflation and geopolitical events, while simultaneously finding investment opportunities in a low-growth global economy.

Four themes for wealth managers

Wealth managers believe the top investment opportunity for the next two years lies in diversifying away from traditional assets such as equities and bonds.
Wealth managers remain cautious, and their top concerns include volatile markets, persistent inflation, and low expected investment returns.
Asset allocators have faced significant challenges as they navigate the transition from a prolonged period of low inflation and low interest rates to an environment of higher inflation and higher interest rates.

Wealth managers have made changes to strategic asset allocations (SAA) over the past few years, continuing to diversify away from traditional asset classes in favour of private markets, seeking areas that offer potentially higher growth and less-correlated returns.
Forty-five percent (45%) of wealth managers highlighted private markets as a top investment priority for the year ahead.
81% of wealth managers who do not invest in illiquid assets identified lengthy lock-in periods as the key reason.

The most common approach reported integrates sustainability into due diligence of external managers and ongoing monitoring – used by 66% of respondents.
There is considerable appetite for impact investing – aimed at generating a positive, measurable environmental or social impact and a financial return – with 43% of respondents fielding client demands for these strategies.
There are regional differences: Europe records the greatest interest and client demand, while enthusiasm in the US is more muted. Overall, respondents recognize the difficulties in implementing such strategies.

Wealth managers have faced significant difficulties in their operating environment, including regulatory compliance and fee and margin pressures. To overcome these challenges, leveraging third-party investment service providers can be a solution.
Improving client service and investing in digital capabilities are seen as effective ways to attract new customers and drive business growth. Launching new products and acquisitions have also been successful in driving assets under management (AUM) and acquiring new clients.

Wealth managers are looking at how they integrate diversification and consider incorporating fixed income and are expanding their clients’ portfolios to include private market investments.

Amit Popat

Global Head of Financial Institutions

Global wealth management investment survey 2023

We share how wealth managers are navigating asset allocation, overcoming operational challenges and meeting the long-term demand for sustainability.

Four themes for wealth managers

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A new chapter begins

Global wealth management investment survey 2023

We share how wealth managers are navigating asset allocation, overcoming operational challenges and meeting the long-term demand for sustainability.

Four themes for wealth managers

Navigating asset allocation post monetary tightening

The appeal of alternative and illiquid investments

Meeting the rising long-term demand for sustainability

Overcoming operational challenges

Global wealth management survey 2023

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Risk management

Secondaries

Governance and due diligence

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Contact us to speak to a wealth management investment specialist