Discretionary model or managed portfolio services (MPS) continued to attract a growing share of advised assets in the year to the end of Q3 2024. Asset growth was aided by favourable market conditions and an acceleration of the shift away from advisory models and bespoke discretionary as a result of Consumer Duty and price pressure.

This report, updated twice-yearly, forms part of NextWealth’s research and insight on the investment propositions of financial advisers. It details quarterly and annual asset growth, compares costs and fees and propositions. This year we explore key themes such as market positioning, sources of growth, portfolios for drawdown, tailored models and unitised MPS.

In addition to this market report, NextWealth publishes reports on advice tech, consolidation and aggregation of financial advice businesses and the rise of segregated mandates in retail. We also host live events, including quarterly council meetings and an annual conference in March. Email enquiries@nextwealth.co.uk for further information.

What did we find?

• Growth in assets: Discretionary MPS assets grew 36% in the year to 30 September 2024, aided by favourable markets, deepening existing relationships and broadening to new firms.
• This year we identify four ways that DFMs position themselves, each with different pressures and considerations.
• Fee distribution: Fund managers are capturing a smaller share of a shrinking pie
• And more..

Who is this report for?

This market report is intended for people in strategy, proposition, distribution and marketing roles in asset management firms, platforms and DFMs. The report quantifies assets in discretionary MPS, compares propositions from leading providers and tracks changes over time. It is for anyone who wishes to better understand the UK discretionary MPS market, including for strategic planning, market assessments, board reports and broader general research purposes. The report can be used by:

• DFMs to benchmark their proposition against the competition, including pricing, proposition, platform availability, assets and asset growth.
• Asset managers to identify the fastest growing DFMs, to fine-tune distribution efforts and to better understand the ambition of their DFM partners.
• Platforms to prioritise DFMs to add to the platform, develop functionality to support DFMs in managing money on behalf of advised clients, and to better understand emerging platform DFM propositions.
• Financial advice businesses to understand the proposition and differentiators of their DFM partners and to benchmark their own investment proposition.
• Private equity firms and consolidators to identify takeover targets and to position their pitch to suit the needs of this changing market.

Methodology

The results presented in this 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.

• Interviews with 30 representatives of DFMs operating MPS on platform.
• Data requests completed by 52 DFMs. Data is as at 30th September 2024.
• Pricing analysis was conducted across 405 portfolios from those DFMs.
• Survey of 340 financial advice professionals, conducted in June and July 2024.

What we heard about last year’s report?

“The depth and quality of this report with the excellent research that has gone into its construction is highly valuable for anyone with a distribution, marketing or product interest in the UK Wholesale market with a focus on MPS or indeed the IFA/Wealth Manager market in general.’ – Michael Beveridge, Head of UK Intermediary Distribution, BNY Mellon Investment Management

“We recently purchased NextWealth’s MPS report and it has quickly become a valuable resource for Tatton. It covers the MPS market objectively and comprehensively providing the level of insight we are searching for. In particular, it charts the growth of this maturing market and the breadth and depth of propositions. We appreciate NextWealth’s interpretive analysis and the honesty of the tables. Having reviewed fully and thought about what it means for Tatton, our thinking is challenged and we are able to be better informed in decision making from here.” – Justine Randall, Chief Commercial Officer at Tatton Investment Management Limited

“NextWealth’s research on the discretionary Model Portfolio Service (MPS) market has provided valuable sector intelligence for Legal & General Investment Management (LGIM). It has helped shape our MPS product offering whilst ensuring our future strategy remains aligned to client’s needs. NextWealth’s insight into the current MPS landscape combined with both Heather and Mark’s experience, helps make sure our conversations with clients are both current and value add to their businesses.” – Paul Measures, Head of Intermediary sales, LGIM.

 

You can complete the form to the right to pre-register for a report sample. The full report is available to purchase. Get in touch with enquiries@nextwealth.co.uk for details.