Model Portfolio Services (MPS) are leading the way when it comes to how clients’ investment solutions are being constructed, according to research from Charles Stanley, part of Raymond James Wealth Management.
Close to a third (32%) of financial advisers and IFAs say that when thinking about their clients' investment solutions within their Centralised Investment Propositions, it is MPS solutions that are the main building block.
Other ways investment solutions for clients are constructed include multi asset funds (27%), in-house investment portfolios (24%), or bespoke DFMs (17%).
Each service holds its own benefits to clients, though with MPS leading the way, this allows advisers to offer scalable and discretionary investment management to clients, with portfolios that are regularly rebalanced and aligned to specific risk profiles. In supporting advisers with investment considerations, it allows them to also focus on other areas of client service and better manage Consumer Duty regulations that impacted how they do business.
For example, 32% of advisers say that Consumer Duty has renewed the focus on what services or solutions they offer to clients, while the same number (32%) 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. 28% revealed they’ve needed to do a lot more training and development.
Following recent changes to the Capital Gains Tax (CGT) allowance, advisers report increased activity in reviewing and recommending investment solutions across client portfolios.
Within this broader shift, many are turning to model portfolios as part of how they construct and manage investment solutions (87% more likely to recommend model portfolios). This reflects a wider reassessment of portfolio construction, with MPS forming a core part of that mix.
Rebecca Stein, Head of Product at Charles Stanley, part of Raymond James Wealth Management, comments: "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.
At Charles Stanley, we partner with IFAs in a way that suits their needs, offering everything from off-the-shelf MPS to fully collaborative, co-manufactured solutions. This provides a structured, institutionally robust framework that enables advisers to design, deliver and defend a strong Centralised Investment Proposition – without compromising their independence or identity, which remains a key priority for many firms as they scale.
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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