Top considerations for financial intermediaries in 2023 

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December 1, 2022

A sharp rise in macroeconomic volatility ended a decade of strong performance for 60/40 portfolios.

Now, investors must face the linked challenges of high inflation, rising yields and market volatility. To put this in perspective, inflation across all 38 members of the OECD between 2010 and 2020 (before the pandemic) ranged between 0% and 3%1. Now it is running at over 10%. This, combined with synchronised interest rate hikes (put in place by major central banks in response to inflation), risks triggering a global recession. Ironically, whether this economic contraction is mild or deep depends, at least in part, on the unpredictable path of inflation and further central bank responses.

In this report, we discuss regional monetary policy dispersion and look at how advisers and their clients can ensure portfolios are diversified both across and within asset classes, as well as by geography, sectors, factors, investment styles and non-traditional market betas. This diversification is vital as it will allow preparations to be made for a period of higher-for-longer interest rates, and an uncertain growth outlook.

Growing geopolitical risks and tightening financial conditions mean that wealth managers face an increasingly challenging investment outlook. The key areas we have addressed in this report will help advisers and their clients to navigate the year ahead.

Six areas of consideration for financial intermediaries

  • 1. Navigating recession risk

    Global recession risk increases as central banks hike rates
  • 2. Capturing themes in private markets

    Capture innovative strategies and sustainable opportunities
  • 3. A hedge fund renaissance

    Rediscover hedge funds in a low-return world
  • 4. Adopting a pragmatic approach to net zero

    ESG integration and engagement rather than outright exclusion
  • 5. Proliferation of alternative products

    Raising awareness of wealth management product development
  • 6. Portfolio transparency and data “operational alpha”

    Better portfolio visibility and transparency on ESG issues

New beginnings

Learn more about the top six considerations for wealth managers and financial intermediaries in 2023.

Global Wealth Management Investment Survey findings

Below are some of the key findings from Mercer’s inaugural Global Wealth Management Investment Survey2. This survey will run each year, so we’d love to get your input in 2023.

Allocating to alternatives

59% of respondents believe the biggest investment opportunity over the next three years is in diversifying portfolios away from traditional equities and bonds.


Investing in illiquid assets

73% of respondents are either currently invested or are considering to invest in illiquid assets over the next 12 months.


Sustainable investments

82% of respondents said that client demand for ESG products has increased over the past 12 months. The main driver for this demand was societal sentiment.

Investment solutions to suit your needs

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