A consultation on the listing rules governing investment funds is unlikely to attract much attention outside the City.

For most investors, changes to the UK Listing Rules are viewed as technical adjustments that sit firmly in the world of lawyers, compliance officers and fund managers. They rarely influence headlines, and even more rarely appear relevant to someone considering buying a property, refinancing an existing portfolio or arranging finance through a private bank.

Yet the Financial Conduct Authority's latest consultation may prove to be more significant than it first appears.

On 26 June 2026, the regulator published proposals to amend the UK's listing regime for closed-ended investment funds, introducing targeted changes designed to strengthen governance and improve the management of conflicts of interest. While the consultation itself is focused on investment trusts rather than lending, it reflects a much broader trend across financial markets.

Increasingly, regulators, institutional investors and lenders are placing greater emphasis on how wealth is managed, not simply how much wealth exists.

That distinction matters.

For high-net-worth individuals, entrepreneurs, family offices and sophisticated investors, investment portfolios have evolved far beyond vehicles designed solely to generate returns. Today, they often sit at the centre of wider wealth planning, providing liquidity, supporting borrowing and allowing investors to pursue new opportunities without unnecessarily disrupting long-term investment strategies.

As a result, the quality, structure and governance of those portfolios are becoming increasingly important.

For anyone considering Lombard lending, securities-backed borrowing or wider private banking facilities, the FCA's latest consultation offers an interesting insight into the direction of travel.

Why The FCA Is Consulting

The consultation, published as CP26/21, follows several months of debate surrounding the governance of listed investment trusts and the balance of power between shareholders, boards and investment managers.

Although the UK's investment trust sector has existed for more than 150 years and remains one of the largest and most respected globally, recent shareholder disputes have exposed areas where existing rules may not provide sufficient clarity.

Much of the discussion has centred on situations where investment managers also hold significant shareholdings within the funds they manage, potentially creating conflicts between commercial interests and shareholder outcomes. Questions have also been raised over board independence and voting rights where substantial shareholders may have interests that differ from those of minority investors.

Rather than introducing wholesale reform, the FCA has chosen a measured approach.

The consultation proposes targeted amendments intended to strengthen investor protections while maintaining the flexibility that has traditionally made London's investment trust market attractive. Among the proposals are enhanced safeguards around related-party transactions, clearer rules governing conflicts of interest and additional protections where investment managers or significant shareholders could exert disproportionate influence over key decisions.

In announcing the consultation, the FCA made clear that its objective is not to discourage shareholder engagement or activism. Instead, it wants to ensure that governance arrangements continue to support confidence in the market as ownership structures become increasingly complex.

That may sound like a relatively narrow regulatory issue.

In reality, it reflects something much larger.

Governance Has Become An Asset In Its Own Right

For decades, investment performance dominated conversations about wealth management.

Investors compared annual returns, benchmark performance and fund rankings. Portfolio construction focused on diversification, asset allocation and risk-adjusted returns, while governance often remained in the background unless something went seriously wrong.

That balance has shifted.

Institutional investors now devote considerable attention to governance because experience has shown that poor oversight can destroy value just as quickly as poor investment decisions.

Conflicts of interest, weak board independence, opaque decision-making and inadequate shareholder protections all have the potential to undermine confidence, even where underlying investments remain fundamentally sound.

The FCA's consultation recognises this reality.

Rather than treating governance as a secondary issue, the regulator is acknowledging that strong oversight forms part of the quality of an investment itself.

That is an important message, because lenders have increasingly reached the same conclusion.

Investment Portfolios Are No Longer Passive Assets

One of the most significant developments in private banking over the past decade has been the changing role of investment portfolios.

Historically, many investors regarded portfolios as relatively untouchable.

They generated income, produced long-term capital growth and formed part of retirement planning, but if significant capital was required—for a property purchase, business investment or tax liability—the instinct was often to sell assets.

Today, that approach is becoming less common among wealthy clients.

Instead, many choose to preserve carefully constructed investment portfolios while accessing liquidity through borrowing.

Private banks have long recognised that substantial investment portfolios can support lending facilities, allowing clients to unlock capital without immediately disposing of investments. Depending on the assets involved, this can provide a level of flexibility that traditional borrowing may struggle to achieve.

The reasons are often straightforward.

Selling investments may crystallise capital gains tax liabilities, interrupt long-term investment strategies or force investors to exit markets during periods of temporary volatility. Rebuilding those positions later can prove both expensive and inefficient.

Borrowing against suitable investment assets may allow those investments to remain intact while providing immediate liquidity for other purposes.

For some clients that might mean purchasing a family home.

For others it may involve acquiring an investment property before another buyer completes the transaction, providing capital for a commercial acquisition or funding a development opportunity while preserving an established investment strategy.

Increasingly, wealth is expected to work harder.

Portfolio Structure Matters As Much As Portfolio Value

This is where many assumptions begin to break down.

A common misconception is that lenders simply assess the value of an investment portfolio before deciding how much they are prepared to lend.

In practice, the process is considerably more sophisticated.

Private banks routinely examine the composition of a portfolio in far greater detail than many borrowers expect. They consider the liquidity of underlying investments, the degree of diversification, concentration within particular sectors, historic volatility, custody arrangements, valuation transparency and the quality of investment management.

The legal structure of the assets themselves can also become relevant.

Listed equities, government bonds, investment-grade fixed income securities, exchange-traded funds and closed-ended investment funds each present different characteristics from a lending perspective. Some provide highly predictable liquidity, while others may involve greater complexity or different pricing dynamics.

Strong governance contributes to confidence throughout that assessment.

A well-managed investment trust operating within a robust governance framework may offer lenders greater reassurance than an equivalent vehicle where conflicts of interest or decision-making processes remain uncertain.

The FCA's consultation is therefore not directly about lending.

However, it reinforces the broader principles that lenders already apply when assessing sophisticated investment portfolios.

The Growing Relationship Between Wealth Management And Property Finance

There was a time when wealth management and property finance operated almost independently.

• Investment advisers focused on portfolio performance.
• Mortgage advisers concentrated on borrowing.
• Accountants dealt with tax planning.
• Solicitors handled the legal work.

Today, those disciplines increasingly overlap.

High-net-worth clients rarely make financial decisions in isolation. Purchasing a £5 million property may involve discussions with a discretionary fund manager, private banker, accountant, tax adviser, solicitor and finance broker before a transaction is completed.

Each adviser is considering the same balance sheet from a different perspective.

• The accountant may be focused on tax efficiency.
• The wealth manager may be protecting long-term investment objectives.
• The private banker may be assessing liquidity.
• The finance adviser may be structuring borrowing across multiple assets.

The best outcomes are often achieved when those conversations happen together rather than separately.

That collaborative approach has become one of the defining characteristics of modern private banking.

Why This Matters For Property Finance

At Willow Private Finance, many of the clients we advise do not have a shortage of wealth.

Instead, they have a shortage of accessible liquidity.

On paper they may possess substantial investment portfolios, significant property holdings and successful businesses.

However, much of that wealth is tied up in assets they have no desire to sell.

That creates an interesting challenge.

A client may wish to purchase another property while believing strongly that financial markets will continue to perform well over the next decade.

Liquidating investments to fund the purchase may solve one problem while creating another by disrupting a carefully considered investment strategy.

In those circumstances, securities-backed lending or Lombard lending may become part of the wider conversation.

Rather than viewing property finance and investment management as competing priorities, both can often be integrated into a broader wealth strategy.

Naturally, every lender applies different criteria.

Eligible investments vary considerably between institutions, advance rates differ according to portfolio composition and ongoing monitoring forms part of many facilities. These solutions are therefore not appropriate for every investor.

However, where suitable, they can offer an effective way of preserving long-term investment objectives while creating immediate access to capital.

Regulation Often Signals Where Markets Are Heading

Financial regulation rarely develops in isolation

.

The issues that attract regulatory attention often reflect wider developments already taking place within financial markets.

The FCA's consultation is a good example.

Its proposals are intended to strengthen governance within the UK's closed-ended investment fund sector, but the themes underpinning those proposals—transparency, oversight, conflicts of interest and investor confidence—are increasingly influencing decisions across wealth management and private banking more generally.

Sophisticated lenders are already examining these factors when assessing complex borrowing structures.

Professional investors are already incorporating governance into portfolio analysis.

Private banks continue to refine how investment assets are evaluated as security.

The consultation therefore tells us something about the future as much as the present.

It highlights an environment in which the quality of wealth management may become almost as important as the quantity of wealth itself.

Final Thoughts

At first glance, the FCA's consultation on closed-ended investment funds appears to have little connection with property finance.

Look more closely, however, and a different picture emerges.

As investment portfolios become increasingly important sources of liquidity, their governance, transparency and structure inevitably become more relevant to lenders as well as investors.

For high-net-worth individuals, entrepreneurs and family offices, borrowing decisions are becoming part of a much wider wealth planning conversation. Property finance is no longer simply about finding the cheapest mortgage or the highest loan-to-value ratio. It is increasingly about understanding how different assets interact, how liquidity can be managed efficiently and how long-term wealth can continue to grow while supporting new opportunities.

The FCA's consultation may focus on investment trusts, but it reinforces a broader message that is likely to shape private banking for years to come.

Well-structured investment portfolios do more than generate returns.

Increasingly, they create financial flexibility.

And in today's market, flexibility is often one of the most valuable assets an investor can possess.