Model portfolio services have overtaken traditional multi-asset funds when constructing clients’ investment solutions, says Charles Stanley.
Almost a third (32%) of advisers and IFAs say that when thinking about their clients’ investment solutions within their Centralised Investment Propositions, MPS solutions are the main building block. This compares to multi-asset funds (27%), in-house investment portfolios (24%) and bespoke DFMs (17%).
Charles Stanley said MPS allows advisers to offer scalable and discretionary investment management to clients, with portfolios that are regularly rebalanced and aligned to specific risk profiles.
More than one in three (32%) advisers say that Consumer Duty has renewed the focus on what services or solutions they offer to clients, while the same number say they have become more selective in what strategic partnerships they use. Another 30% say consumer duty has helped advisers do more business, while 29% have needed to bring in external governance support to help them in how they do business.
Following recent changes to the Capital Gains Tax allowance, advisers also noted increased activity in reviewing and recommending investment solutions across client portfolios.
Against this backdrop, Charles Stanley said many are turning to model portfolios as part of how they construct and manage investment solutions, with 87% more likely to recommend model portfolios.
Rebecca Stein, head of product at Charles Stanley, said: “Advisers are undergoing a clear structural shift in how they construct and deliver client portfolios. While multi-asset funds continue to play a role, there is a growing preference for outsourced, centralised investment solutions.
“MPS is increasingly moving to the core of these strategies, offering greater consistency, efficiency and governance, as well as freeing up time for advisers to focus on their clients.
“Importantly, many advisers are looking to go further – moving beyond simply selecting portfolios – to shaping how they are constructed to align more closely with an adviser’s proposition and client needs.
“As the industry continues to shift towards greater personalisation and tailored solutions, we expect MPS to remain a core building block in client portfolios for years to come.”
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