The Case for Multi-Asset Class Portfolios in 2026

Beyond the 60/40 model

The traditional 60/40 portfolio served investors well for decades. But the correlation between equities and bonds has shifted meaningfully in recent years, and the assumption that fixed income will always cushion equity drawdowns no longer holds reliably.

For wealth advisers serving HNW clients, this is not an abstract concern. Clients with GBP 2 million or more in investable assets have the capacity and the time horizon to access asset classes that genuinely diversify, rather than simply rebalancing between two correlated buckets.

What a broader allocation looks like

Real assets

Property, infrastructure, and natural resources offer inflation protection and income streams that behave differently from traditional financial assets. For HNW clients, direct property holdings or infrastructure funds can provide stable returns with low correlation to public markets.

Private markets

Private equity and private credit have historically delivered premiums over their public market equivalents. The trade-off is liquidity, but for clients with adequate reserves and a long-term outlook, the illiquidity premium is well compensated.

Structured products

Used judiciously, structured products can provide defined outcomes that are difficult to replicate with traditional instruments. Capital protection, enhanced yield, or leveraged participation in specific markets can all serve a purpose within a well-constructed portfolio.

Alternative strategies

Hedge fund strategies, managed futures, and systematic approaches can offer genuinely uncorrelated returns. The key for advisers is understanding the fee structures and ensuring they represent fair value under Consumer Duty.

Illustrative allocation comparison

The chart below shows a simplified comparison between a traditional 60/40 portfolio and a diversified multi-asset allocation designed for an HNW client with a long-term horizon.

Why this matters now

Several factors make a broader allocation more relevant than ever in 2026:

1. Interest rate uncertainty. With central banks navigating between inflation control and growth support, traditional fixed income allocations carry more risk than many advisers appreciate.

2. Equity concentration. Global equity indices have become increasingly concentrated in a small number of technology companies. A portfolio that tracks the index is less diversified than it appears.

3. Client expectations. HNW clients are increasingly sophisticated in their understanding of investment. They expect their adviser to go beyond off-the-shelf model portfolios.

4. Competitive pressure. Clients leaving traditional wealth managers are doing so partly because they feel their portfolios lack genuine personalisation. Offering a broader asset class range is one way to differentiate.

Implementation considerations

Platform capability

Not all platforms support the full range of asset classes that a multi-asset approach requires. Choosing the right platform is essential. Advisers need a platform that can custody alternatives, handle different settlement cycles, and provide consolidated reporting across asset types.

Custody and safeguarding

When portfolios include less liquid or more complex assets, institutional-grade custody becomes even more important. Clients need confidence that their assets are held securely, regardless of the asset class.

Due diligence

A broader allocation means a wider universe of potential investments, and a greater responsibility for due diligence. Advisers must be able to articulate why each asset class is included, what role it plays in the portfolio, and how it has been assessed for suitability.

The Investment Association ↗ provides useful frameworks for thinking about asset allocation and fund selection in a UK context.

Suitability and documentation

Consumer Duty requires clear evidence that recommendations are suitable and that costs are justified. For more complex portfolios, this means more detailed suitability reports and more robust documentation of the investment rationale.

Getting started

Advisers do not need to overhaul their entire investment proposition overnight. A practical approach is to:

• Audit your current allocation. Understand how much genuine diversification your existing portfolios provide.
• Identify gaps. Where are clients exposed to risks they may not be aware of? Where are opportunities being missed?
• Assess infrastructure. Can your current platform and custody arrangements support a broader allocation?
• Start with one or two additions. Property or infrastructure exposure is often the most natural first step for advisers expanding beyond equities and bonds.

The goal is not complexity for its own sake. It is building portfolios that are genuinely suited to HNW clients and that deliver the risk-adjusted returns they expect.