The UK MPS market has grown rapidly over the past two years. With total market assets reaching £208bn and growth of 32% year-on-year, MPS continues to attract assets at scale. Behind those headline numbers, a story is emerging. Active model portfolios are  continuing to hold their ground across price and market share.

Active portfolios maintained their market share and their pricing. Active portfolios make up more than one third of assets in MPS and have held their market share over the past 12 months. Passive portfolios have grown their market share in the year to Q1 2026 with hybrid portfolios reducing their share of total MPS market assets.

The differences between style of portfolios can also be seen in pricing. Over the past two years, the average total cost for active portfolios has fallen by just three basis points. Hybrid and passive portfolios have each fallen 10 basis points over the same period. Active portfolios appear under less price pressure with steady market share and smaller total cost reductions.

The asset-weighted average total cost for the MPS market overall now sits at 49bps, and the pace of fee reduction is slowing. For much of the past five years, falling OCFs drove down costs, particularly as passive allocations rose. Now, the mechanisms behind that compression are more constrained. Firms are exploring operational efficiencies through rebalancing, unitised sleeves, and ETF adoption, but none has yet driven a further step change in pricing. Whether active’s resilience holds is a question NextWealth will continue to track through our MPS Proposition Comparison report series.

To find out more about what is driving growth in the MPS market, how the market is changing shape and the headwinds and tailwinds for growth in DFM assets contact enquiries@nextwealth.co.uk to purchase your copy of the report. 

About the NextWealth MPS Proposition Comparison Report

The results presented in the report are based on data requests from DFMs, interviews with representatives of those firms, surveys of financial advice professionals and our knowledge and expertise of the UK financial advice and platform market. In total, this research was based on:

• Data requests completed by 59 DFMs (data is accurate as of 31^st March 2026).
• Pricing analysis conducted across 546 portfolios from those DFMs.

Mark Aldous, Senior Quantitative Researcher at NextWealth

FAQS:

1. What is driving growth in the UK Managed Portfolio Service (MPS) market?

The UK MPS market continues to expand due to increasing adviser adoption, operational efficiency benefits, and growing demand for outsourced investment management. Total MPS assets reached £208 billion in Q1 2026, representing 32% year-on-year growth. Financial advisers are increasingly using MPS solutions to streamline portfolio management, improve scalability, and deliver consistent client outcomes.

2. Are active MPS portfolios losing market share to passive portfolios?

No. While passive MPS portfolios have increased their share of market assets, active portfolios have maintained a stable market position and still account for more than one-third of total MPS assets. The data suggests active strategies remain attractive to advisers and investors despite the continued growth of passive investing within the UK MPS market.

3. How do active, passive and hybrid MPS portfolio costs compare?

Active MPS portfolios have experienced relatively limited fee reductions compared with passive and hybrid portfolios. Over the past two years, the average total cost of active portfolios fell by just three basis points, while passive and hybrid portfolios each declined by around 10 basis points. As of Q1 2026, the asset-weighted average total cost across the MPS market is 49 basis points.

4. Why are MPS fee reductions slowing down?

Fee compression in the MPS market is beginning to slow because many of the factors that previously reduced costs, such as falling ongoing fund charges and increased passive allocations, have already been realised. Firms are now exploring efficiencies through ETF adoption, portfolio rebalancing improvements, and unitised investment structures, but these measures have not yet produced a significant new reduction in overall MPS pricing.