After a prolonged period in which strong equity returns largely masked underlying risks, conditions have become more unsettled in recent years. Conflicts, trade tensions and geopolitical uncertainty are refocusing attention on volatility, with advisers once again having frequent conversations with clients about market shocks, sequencing risk (selling investments to support income payments) and investing during falling markets.
And the situation shows little sign of improving. Valuations remain elevated in some parts of global equity markets and the current conflict in Iran has only made the economic outlook more uncertain. Wesleyan adviser research finds that 92% [1]expect investment markets will be more volatile in 2026, driven by uncertainty over the global economy and the rate of UK inflation as well as ongoing global conflicts and concerns about technology valuations, including AI companies.
Why now?
Of course, volatility isn’t a new problem for investors. However, the difference this time is that its resurfacing coincides with the Government encouraging broader retail participation in markets. More than four in five advisers (82%) believe this push to build a stronger retail investment culture will make client concerns around market volatility a bigger issue.
The majority of respondents (84%) believe the performance of their clients’ investments is under threat due to volatility next year, suggesting this new wave of less experienced investors will encounter market stress early in their investment journey. Policy momentum is driving greater participation in markets just as advisers expect conditions to become more unstable. Almost half of advisers (45%) expect between 20% and 40% of their clients to be put off investing in growth assets such as equities, or even dependable assets such as bonds and property.
Portfolio construction in volatile conditions
Wesleyan’s research highlights a range of strategies firms are using to help their clients navigate volatility. While six in ten (60%) plan to issue communications discussing what’s driving market movements, the potential outlook and what it may mean for clients’ financial goals, a sizeable group are also considering investment changes. Nearly half (48%) are seeking further diversification opportunities, such as commodities or private equity, and the same proportion (48%) said they will start or increase investments in a ‘smoothed’ fund.
Smoothed with-profits funds aim to provide a degree of downside protection during periods of market stress. They hold back some returns in stronger equity markets to help support returns when markets fall, reducing the impact of short-term volatility. This can offer greater stability for clients and help them avoid making reactive decisions during periods of market stress.
How Copia Select Smoothed is different
Copia Select Smoothed portfolios leverage the benefits of with-profits funds alongside complementary assets to give advisers a practical solution for clients who want to stay invested but are concerned about volatility.
Each risk-rated portfolio includes a 30% allocation to Wesleyan’s smoothed With Profits Fund, with the remaining 70% invested across a diversified mix of assets selected and overseen by Copia’s expert investment team.
This structure allows advisers to combine the stability created by the on-platform fund’s smoothing mechanism with the long-term growth potential of an actively managed multi-asset portfolio, while maintaining liquidity and transparency.
The approach can help mitigate sequencing risk, helping clients drawing an income or planning to do so in the near future. As the with-profits part of the portfolio reserves gains in strong markets to support payouts in weak years, investors are less likely to be forced to sell assets during market downturns to generate normal income. It can also be attractive to more cautious investors seeking multi-asset exposure with lower volatility than a traditional managed portfolio.
To maintain the potential for long-term growth, periods of heightened volatility require careful portfolio construction rather than wholesale withdrawal from equities and bonds. With advisers believing volatility will remain elevated at a time when more retail investors are expected to enter the market, solutions that help clients remain invested without exposing them fully to short-term market swings may become increasingly relevant. Blending smoothing with active portfolio management provides a pragmatic way for advisers to manage volatility while maintaining long-term investment discipline.
This article is intended for regulated financial advisers and investment professionals only. Copia does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such. Remember, the value of investments will fluctuate, and capital is at risk.
[1] 2026 predicted to be a year of market volatility, Wesleyan, 29 January 2026
Want to find out more?
Watch our Senior Portfolio Manager, Pete Wasko discuss managing the Smoothed portfolios.
If you think our Smoothed portfolios might be suitable for some of your clients, call us on 020 4599 6475 or get in touch online.
21st April 2026
Volatility is back on the agenda
After a prolonged period in which strong equity returns largely masked underlying risks, conditions have become more unsettled in recent years. Conflicts, trade tensions and geopolitical uncertainty are refocusing attention on volatility, with advisers once again having frequent conversations with clients about market shocks, sequencing risk (selling investments to support income payments) and investing during falling markets.
And the situation shows little sign of improving. Valuations remain elevated in some parts of global equity markets and the current conflict in Iran has only made the economic outlook more uncertain. Wesleyan adviser research finds that 92% [1]expect investment markets will be more volatile in 2026, driven by uncertainty over the global economy and the rate of UK inflation as well as ongoing global conflicts and concerns about technology valuations, including AI companies.
Why now?
Of course, volatility isn’t a new problem for investors. However, the difference this time is that its resurfacing coincides with the Government encouraging broader retail participation in markets. More than four in five advisers (82%) believe this push to build a stronger retail investment culture will make client concerns around market volatility a bigger issue.
The majority of respondents (84%) believe the performance of their clients’ investments is under threat due to volatility next year, suggesting this new wave of less experienced investors will encounter market stress early in their investment journey. Policy momentum is driving greater participation in markets just as advisers expect conditions to become more unstable. Almost half of advisers (45%) expect between 20% and 40% of their clients to be put off investing in growth assets such as equities, or even dependable assets such as bonds and property.
Portfolio construction in volatile conditions
Wesleyan’s research highlights a range of strategies firms are using to help their clients navigate volatility. While six in ten (60%) plan to issue communications discussing what’s driving market movements, the potential outlook and what it may mean for clients’ financial goals, a sizeable group are also considering investment changes. Nearly half (48%) are seeking further diversification opportunities, such as commodities or private equity, and the same proportion (48%) said they will start or increase investments in a ‘smoothed’ fund.
Smoothed with-profits funds aim to provide a degree of downside protection during periods of market stress. They hold back some returns in stronger equity markets to help support returns when markets fall, reducing the impact of short-term volatility. This can offer greater stability for clients and help them avoid making reactive decisions during periods of market stress.
How Copia Select Smoothed is different
Copia Select Smoothed portfolios leverage the benefits of with-profits funds alongside complementary assets to give advisers a practical solution for clients who want to stay invested but are concerned about volatility.
Each risk-rated portfolio includes a 30% allocation to Wesleyan’s smoothed With Profits Fund, with the remaining 70% invested across a diversified mix of assets selected and overseen by Copia’s expert investment team.
This structure allows advisers to combine the stability created by the on-platform fund’s smoothing mechanism with the long-term growth potential of an actively managed multi-asset portfolio, while maintaining liquidity and transparency.
The approach can help mitigate sequencing risk, helping clients drawing an income or planning to do so in the near future. As the with-profits part of the portfolio reserves gains in strong markets to support payouts in weak years, investors are less likely to be forced to sell assets during market downturns to generate normal income. It can also be attractive to more cautious investors seeking multi-asset exposure with lower volatility than a traditional managed portfolio.
To maintain the potential for long-term growth, periods of heightened volatility require careful portfolio construction rather than wholesale withdrawal from equities and bonds. With advisers believing volatility will remain elevated at a time when more retail investors are expected to enter the market, solutions that help clients remain invested without exposing them fully to short-term market swings may become increasingly relevant. Blending smoothing with active portfolio management provides a pragmatic way for advisers to manage volatility while maintaining long-term investment discipline.
This article is intended for regulated financial advisers and investment professionals only. Copia does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such. Remember, the value of investments will fluctuate, and capital is at risk.
[1] 2026 predicted to be a year of market volatility, Wesleyan, 29 January 2026
Want to find out more?
Watch our Senior Portfolio Manager, Pete Wasko discuss managing the Smoothed portfolios.
If you think our Smoothed portfolios might be suitable for some of your clients, call us on 020 4599 6475 or get in touch online.