The market for smoothed funds is poised for growth.

Smoothed funds are recommended by 35% of financial advisers for new client money, placing them behind multi-asset funds and discretionary model portfolio services (MPS) and ahead of annuities. They are most often recommended for cautious or low-risk clients, designed to protect against sudden market losses.

Smoothed funds are a bit ‘marmite’. Financial advisers who use them believe they play an important role in client portfolios. Those that don’t are concerned about transparency, higher costs and level of client understanding. While M&G’s PruFund dominates the sector, new entrants and propositional features have introduced more choice.

At NextWealth, we have launched a new report comparing propositions for providers of smoothed funds, exploring how financial advisers use them in client portfolios and why non-users don’t recommend them.

How can this report be used

This report explores how financial advice professionals use smoothed funds and compares the major providers’ propositions. The report can be used to:

• Grow the market: Only one third of financial advisers recommend smoothed funds for new client money and only 13% expect to increase use in the next year. To grow the market for smoothed funds, providers must understand and address the objections of the two-thirds of non-users and how the solutions might meet their client needs.
• Prioritise proposition, marketing and sales efforts: The report clearly sets out the drivers behind decision-making, helping providers prioritise propositional enhancements while designing marketing and sales activities to achieve maximum impact.
• Competitive benchmarks: We compare propositional elements including price, risk rating integration and platform availability, allowing firms to benchmark their proposition against peers.
• Compare brand perception: Based on a survey of financial advisers and in-depth interviews with users and non-users of smoothed funds, the report provides unvarnished opinions, allowing firms to compare the perception of their brand and offering to the market. A supplementary document with additional quotes was provided individually to providers offering additional feedback.

Methodology

The results presented in this report are based on capturing a blend of data and insights from smoothed fund providers, financial advice professionals and investment decision-makers at advice businesses. This is supported by our deep, expert knowledge of the UK financial advice and platform markets.

• Interviews with eight investment decision-makers at financial advice businesses between 11 June and 10 July 2025.
• Data requests completed by four providers of smoothed funds. Data is as at 30 June 2025. Standard Life did not supply data and so the latest fact sheet data is used and is as at 31 March 2025.
• Survey of 200 financial advisers, conducted in June 2025.

To download a copy of the sample, complete the form on the right.

If you are interested in purchasing a copy or have a question about the research, get in touch at enquiries@nextwealth.co.uk.

Suggest citation: NextWealth. July 2025. Smoothed Funds Proposition & Distribution Report 2025. https://nextwealth.co.uk/research/smoothed-managed-fund-proposition-distribution-report-2025/