MPS fees have reached a plateau – and that’s a sign of a maturing market

For much of the past five years, falling fees have been a defining feature of the discretionary MPS market. Providers competed aggressively on price as assets grew rapidly.

The latest NextWealth MPS Proposition Comparison Report shows that this phase is now coming to an end.

The new market average

The average total cost of a discretionary MPS – combining the DFM fee and underlying OCF – fell from 1.00% in 2021 to 0.51% in 2025. That represents a dramatic structural shift in how model portfolios are priced.

However, the key insight from the 2025 data is not how low fees have gone, but how the rate of decline is plateauing. In the past 12 months, the market average fell by just 3 basis points, compared with double-digit declines in previous years.

Why price pressure is easing

Most of the downward pressure on costs has already worked its way through the system. The increased use of passive instruments has driven down underlying OCFs.

This plateau has important implications. For DFMs, further price cuts are unlikely to deliver meaningful competitive advantage. Growth is increasingly being driven by service levels, investment expertise, and propositional breadth rather than headline fees.

For financial advice professionals , the stabilisation of costs provides confidence that MPS pricing now represents durable value for clients, rather than a temporary race to the bottom.

The MPS market has not stopped evolving – but on pricing, it has found its floor.

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:

• Interviews with 22 representatives of DFMs operating MPS on platform.
• Data requests completed by 55 DFMs (data is accurate as of 30th September 2025).
• Pricing analysis conducted across 423 portfolios from those DFMs.
• A survey of 296 financial advice professionals, conducted in June and July 2025.

Mark Aldous

Senior Quantitative Researcher, NextWealth

FAQ: MPS fees are plateauing as the market matures

Why are discretionary MPS fees plateauing in the UK market?

NextWealth research shows that most price compression has already worked through the system, driven by increased use of passive investments and earlier competitive fee cuts. Many providers are now operating close to a sustainable pricing floor.

What is the current average cost of discretionary MPS?

NextWealth research shows that the average total cost of a discretionary MPS, combining DFM fees and underlying OCFs, fell from 1.00% in 2021 to 0.51% in 2025. The pace of decline has slowed significantly in the past year falling only 3 basis points in the past 12 months.

Are MPS fees still falling in the DFM market?

NextWealth research shows that MPS fees have only reduced by around 8 basis points over the past four years. This indicates limited scope for further meaningful price reductions.