MPS Beats Traditional ‘Bread and Butter’ Multi-Asset Funds

Why It Matters

The surge in MPS usage signals a structural transformation in wealth management, where efficiency, governance and personalization outweigh traditional fund offerings, reshaping revenue streams for asset managers and technology providers.

Key Takeaways

• 32% of advisers name MPS as primary solution building block.
• MPS surpasses multi‑asset funds (27%) and in‑house portfolios (24%).
• 87% of advisers now more likely to recommend model portfolios.
• Consumer Duty drives advisers to select fewer, more strategic partners.
• Training needs rise, with 28% reporting increased development requirements.

Pulse Analysis

The rapid ascent of Model Portfolio Services reflects a fundamental re‑engineering of how advisers construct client portfolios. Recent research from Charles Stanley shows that one‑third of UK advisers now view MPS as the cornerstone of their investment propositions, a clear overtaking of traditional multi‑asset funds. This trend aligns with heightened regulatory scrutiny under the Consumer Duty, which has forced advisers to prioritize solution robustness and to trim the number of external partners they rely on. Coupled with the recent uplift in capital gains tax allowances, advisers are actively revisiting client holdings, creating fertile ground for model portfolios to gain traction.

MPS delivers tangible operational advantages that resonate with advisers seeking to scale personalized advice. By centralising portfolio construction, MPS offers consistent risk‑return profiles, streamlined governance, and reduced administrative overhead, freeing advisers to focus on relationship‑driven activities. The model also supports deeper alignment with an adviser’s own value proposition, allowing for bespoke tilts and thematic exposures that generic funds cannot match. As 87% of advisers report a heightened propensity to recommend model portfolios, the industry is witnessing a migration toward outsourced, technology‑enabled solutions that blend efficiency with customization.

For asset managers and platform providers, the MPS boom presents both opportunity and challenge. Distribution models must adapt to integrate model‑based offerings, while maintaining transparency and fee competitiveness. The rise in training and development needs—highlighted by 28% of advisers—underscores the importance of robust education programs to ensure effective implementation. Looking ahead, MPS is poised to remain a core component of wealth‑management strategies, driving a more personalized, governance‑focused landscape that could reshape the competitive dynamics of the multi‑asset market.