What wealth portfolios are missing — and why it matters for individual investors

Despite the evolution of investment platforms and products, many wealth portfolios remain fundamentally limited in scope, sophistication and resilience. While institutional investors have long benefited from diversified, high-quality and cost-effective investment strategies, individual investors are still underserved.

We believe these sorts of high-quality investment solutions should be available to individuals for both their institutional and personal savings pots, giving the best chance of meeting financial goals over the long term.

This article explores areas where we believe wealth managers now have more opportunities to deliver better financial outcomes for their clients.

Global investment opportunities – reduce over-reliance to domestic markets

Asset allocation within the UK wealth market still exhibits a strong bias towards domestic equities and bonds. Figure 1 shows a typical UK wealth portfolio. On average, UK investors allocate 20–30% of their equity portfolios domestically^[1], despite the UK representing just 3% of global equity opportunities. This not only limits access to higher-growth markets—such as emerging economies and tech-heavy regions—but also means investment returns are heavily reliant on the UK's economic, regulatory and geopolitical environment.

Risk warning: Past performance does not predict future returns

So what? Well, over the past decade, global equities (excluding the UK) have outperformed UK equities by 6.3% which means that for every $100 invested, investors would have received $168 over 10 years ^[2].

Whilst there are good reasons for allocating to domestic markets, investors should consider the broadest opportunity set when allocating capital. In an environment shaped by structural shifts—such as climate transition, technological innovation and evolving market leadership—thoughtful allocation across geographies and strategies can be a good risk management tool. Identifying solutions that balance cost efficiency and drivers of returns can help ensure portfolios are well-positioned for long-term resilience and growth.

Access to institutional quality investment opportunities

Institutional investors benefit from scale, often with significant resource which brings access to a broader range of investment opportunities. In contrast, wealth portfolios are still largely invested in traditional equities and bonds and could be missing out on better outcomes from assets outside traditional markets.

These include:

• Private Markets: Figure 1 shows very little allocation to private markets. High-quality private equity managers have consistently outperformed public markets by around 4% annually (to 31 Dec 2024)^[3]. Yet, access remains limited for individuals due to structural barriers. However, innovative fund structures like Long Term Asset Funds (LTAFs) are beginning to bridge this gap and become more accessible to the wealth community
• Insurance-Linked Securities (ILS): These can be a great complementary asset to mainstream equity and bonds within a portfolio. The return profile often generates steady income (through premiums paid) and insurance tends to link to events such as natural disasters, which means the returns are generally not linked to global economies or markets. Currently these types of assets form very small parts of typical wealth portfolios
• Securitised Credit: At a time of high pricing in traditional investment grade corporate credit^[4], other areas of the enormous global credit market such as securitized credit are offering attractive yields^[5] without sacrificing security or liquidity. Yet we still see typical wealth portfolios with very small allocations outside of core bond markets

Improving implementation

Individuals have different requirements that need to be carefully considered especially outside core markets. At WTW we have a long history of working with managers to design products to meet the specific needs of our clients rather than simply accepting something "off-the-shelf". This is even more important when working with risk parameters and liquidity constraints of our wealth clients.

Building on our decades of investments experience and advice to the institutional market, we're readdressing the balance and providing solutions which leverage our global institutional capabilities. We aim to build better portfolios for wealth clients that aim to improve the consistency of outcomes through the use of:

• Diversification: We access a diverse range of investment opportunities to reduce reliance on equity markets to drive returns. This can provide greater stability to performance, particularly during periods of uncertainty
• Risk protection: We hold assets that are expected to perform well during periods of equity underperformance (for example long-dated U.S. Treasuries and Treasury inflation-protected securities), providing effective risk protection
• Active management: We employ active managers to produce superior returns over and above the market through their specialist knowledge and stock selection abilities

Conclusion: Time for a paradigm shift

The wealth management industry and managers that serve the industry must evolve beyond traditional allocations and limited access. By embracing global diversification, a much broader range of investments, fee efficiency and innovative portfolio design, wealth managers can offer individual investors the same advantages long enjoyed by other investors.

We're on a shared journey — one that aims to build portfolios that are not only more resilient and better performing, but also fairer and more accessible. The tools and strategies are already within reach; now it's about working together to bring them into the wealth space, shaping a future that benefits everyone.

Risk warnings

• This document is based on information available to Willis Towers Watson at the date of issue and takes no account of subsequent developments
• Towers Watson Limited has approved this document for issue to recipients categorised as Professional Clients only
• This material is intended for investors with long-term investment time horizons
• The value of all investments and the income from them can go down as well as up. This means you could get back less than you invested
• Changes in exchange rates may cause the value of investments to decrease or increase
• Past performance does not predict future returns
• Private markets refer to investments not traded on a public exchange or market
• Underlying private markets investments of the fund will normally be in unlisted companies and assets whose securities are not publicly traded and are therefore likely to be illiquid. They carry substantially higher risk than many investments in the equity of larger, listed companies, their public debt securities, or in listed real assets
• Investors should regard an investment in private markets as a long-term investment which carries higher risk than many other forms of investment
• There is usually less transparency in place around the management of private markets investments given the lower disclosure requirements. In general, there is limited information available on the investments and performance of the underlying portfolio companies and assets, other than annual or semi-annual financial statements, or sometimes, quarterly reports
• Such investments are more difficult to value given that they are not traded on a public exchange or market

Regulatory Disclaimer

Towers Watson Limited (trading as Willis Towers Watson) (Head Office: Watson House, London Road, Reigate, Surrey, RH2 9PQ) is authorised and regulated in the United Kingdom by the Financial Conduct Authority (FCA Register Firm Reference Number 432886, refer to the FCA register for further details) and incorporated in England and Wales with Company Number 05379716.

This material is based on information available to WTW at the date of this material or other date indicated and takes no account of developments after that date. In preparing this material we have relied upon data supplied to us or our affiliates by third parties. Whilst reasonable care has been taken to gauge the reliability of this data, we provide no guarantee as to the accuracy or completeness of this data and WTW and its affiliates and their respective directors, officers and employees accept no responsibility and will not be liable for any errors, omissions or misrepresentations by any third party in respect of such data.

This material may not be reproduced or distributed to any other party, whether in whole or in part, without WTW's prior written permission, except as may be required by law. In the absence of our express written agreement to the contrary, WTW and its affiliates and their respective directors, officers and employees accept no responsibility and will not be liable.

Footnotes

1. "Investment Association (IA) Mixed Investment 40-85% Shares sector portfolio allocations." Return to article undo
2. "MSCI World Ex-UK index delivered 14.6% per annum over 10 years to end of October 2025. By comparison MSCI UK index delivered 8.34% per annum." Return to article undo
3. "Preqin Benchmarks: Private Markets Performance Data Q1 2025." Return to article undo
4. "Sterling corporate bond spreads (iBoxx All Maturity Non-Gilt index vs FTSE-A Gilts All Stocks Index (bps)." Return to article undo
5. "To calculate the average performance difference, we have taken a broad average return across private markets asset classes available to WTW at the time of writing and compared that to a global public market equity return." Return to article undo