Top themes for the investment management sector in 2026

The investment management sector moves into 2026 under continued pressure to balance growth ambitions with an increasingly challenging regulatory agenda. This is driven by client demand for new asset classes, evolving fund structures, and the impact of emerging technologies such as blockchain and AI (which are reshaping current operating models). Alongside this, regulators are keen to balance high quality consumer outcomes with a tough growth agenda.

In light of these changes, investment managers are now contemplating multiple investments in change – however few have the scale or capability to pursue all opportunities effectively. As such, the greatest challenge of 2026 is prioritising change agendas and addressing any weakness where significant investment isn’t possible. 

Against this backdrop, several themes are likely to dominate board agendas and transformation programmes over the coming year. 

Fund tokenisation and evolving dealing models 

Fund tokenisation continues to move from experimentation towards implementation. Recent FCA consultations point to a clearer regulatory pathway for operating tokenised authorised funds, alongside optional dealing models designed to simplify parts of the transaction chain for both tokenised and conventional structures.

The FCA’s CP25/28, progressing fund tokenisation, sets out guidance for operating tokenised authorised funds under the ‘blueprint’ model. This includes expectations around how registers are maintained on distributed ledger technology (DLT), contingency arrangements, and mechanisms for correcting errors, such as unilateral mint and burn or corrective transactions. 

The consultation also introduces an optional Direct-to-Fund (D2F) dealing model, removing the authorised fund manager’s principal dealing role and replacing the manager’s box with an Issues and Cancellations Account held as scheme property. This is intended to streamline flows for both tokenised and traditional funds.

For investment managers, this is not simply a product innovation discussion. It has direct implications for how registers are maintained, how instructions flow through the dealing chain, and how oversight is exercised across administrators, depositaries, and other service providers. It also raises broader questions around operational resilience, outsourcing governance and control assurance. 

Key challenges for 2026

Firms considering tokenisation should focus early on operating model readiness. This includes understanding where responsibilities shift, how controls need to adapt, and whether existing governance frameworks remain effective as processes change. Firms should also be clear on the strategic objective of tokenisation, particularly where efficiency gains need to be balanced against increased complexity and reliance on third parties. 

Liquidity management under sharper scrutiny 

Liquidity risk management is returning to the forefront of regulatory attention. Recent proposals (CP25/38) reinforce the expectation that authorised fund managers must not only have liquidity management tools available, but demonstrate that those tools are appropriately calibrated, governed and used to inform decision-making.

Supervisory focus is shifting away from the existence of policies towards the quality of execution. Regulators are increasingly interested in how liquidity assumptions align with fund terms, how stress scenarios are applied in practice, and how escalation and governance operate when market conditions deteriorate. The FCA is also proposing annual retrospectives on anti-dilution tools and stronger links between portfolio construction, redemption terms and liquidity appetite. 

Key challenges for 2026

Firms should ensure that liquidity management is embedded as a live risk discipline rather than a static compliance requirement. This means strengthening the link between portfolio construction, redemption terms, and liquidity risk appetite. Management information should support timely, well-evidenced decisions and provide a clear audit trail when conditions tighten. Authorised fund managers delegating portfolio management should note that responsibility for liquidity risk remains with them. 

Private markets – valuation governance and conflicts 

Private markets remain a strategic growth area, but regulatory scrutiny of valuation practices continues to intensify. Supervisory reviews have highlighted the importance of independence, consistency and challenge, particularly as private assets are offered through a wider range of structures and to a broader investor base.

Valuation governance has implications that extend well beyond finance teams. It affects product design, investor outcomes, fee calculations and the credibility of performance reporting. Weaknesses in valuation control can escalate quickly into conduct, reputational and prudential risks. 

Key challenges for 2026

Firms active in private markets should reassess whether valuation frameworks remain fit for purpose as strategies scale and diversify. This includes reviewing how conflicts are identified and managed, how judgements are challenged, and how firms would respond if market conditions limit the availability of reliable pricing inputs. Strengthening governance ahead of stress events will be more effective than reacting under pressure. 

Disclosure reform and the drive for simplification 

The UK regulatory framework for retail investment disclosures continues to evolve, with reforms aimed at replacing inherited EU approaches and improving consumer engagement. Alongside this, there is a broader policy drive to reduce unnecessary complexity and improve the accessibility of investment information.

For firms, this is not simply a drafting exercise. Disclosure reform affects product governance, distribution arrangements, and ongoing oversight. It also interacts directly with Consumer Duty expectations around understanding, fair value and outcomes. 

Key challenges for 2026

As firms prepare for implementation, attention should focus on governance and operating model impacts. This includes how disclosures are produced, reviewed and updated, how consistency is maintained across channels, and how distributors use and present product information. Manufacturers will own the product summary, while distributors must ensure appropriate pre-sale presentation and post-sale delivery in a durable medium. Embedding disclosure reform within wider product governance frameworks will make implementation more manageable and outcomes more sustainable. 

Consolidation in wealth and advice 

Consolidation across wealth management and financial advice shows no sign of slowing, but supervisory expectations are becoming more explicit. Recent regulatory reviews (namely, the FCA’s multi-firm review of consolidation in the financial advice and wealth management sector) emphasise that consolidation must not come at the expense of client outcomes, operational resilience or financial sustainability.  

The challenge for consolidators is demonstrating that governance, controls and culture scale effectively as businesses grow through acquisition. Integration risks can persist long after transactions are complete, particularly where firms expand across multiple legal entities at pace. 

Key challenges for 2026

Firms pursuing consolidation strategies should treat integration as a regulated change programme. This involves strengthening group-level governance, clearly defining accountability, and prioritising the harmonisation of key controls underpinning suitability, ongoing service and complaints handling. Demonstrating consistent outcomes across acquired businesses is likely to remain a key area of supervisory focus. 

For more insight and guidance, contact David Morrey.

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