Financial advisers expect to increase MPS usage over the next three years

More than eight in 10 (82 per cent) financial advisers expect to increase their use of model portfolio services (MPS) over the next two to three years, analysis from Nedgroup Investments has found.

Of those who expect to increase their MPS usage, 34 per cent said they would do so ‘significantly’, while 48 per cent said they would ‘somewhat’.

Just 4 per cent of advisers surveyed planned to reduce their use of MPS over the next two to three years and 14 per cent were looking to keep their usage ‘about the same’.

All the responding financial advisers said they were already using MPS as part of their client offering, including 64 per cent who used MPS for the majority of their clients.

Third-party MPS solutions were the most popular, with 24 per cent primarily favouring them for their investment portfolios, although they were closely followed by discretionary fund manager and multi-asset funds, which were both favoured by 22 per cent.

Almost one in five (18 per cent) said in-house model portfolios managed by the advice team was their preferred choice, while 14 per cent cited bespoke DFM portfolios.

“MPS clearly continue to be a core part of advisers' investment propositions, and the research shows that this is set to accelerate,” commented Nedgroup Investments chief commercial officer, Apiramy Jeyarajah.

“With over 80 per cent of advisers expecting to increase their use of MPS over the next two-to-three years, we can see growing confidence in outsourced investment solutions, as firms look to deliver consistent client outcomes, improve efficiency, and enable advisers to spend more time where they add the greatest value: helping their clients achieve their financial goals.

“It’s significant that every adviser surveyed is already using an MPS in some capacity, with two-thirds using them heavily for most of their clients. The direction of travel is clear, demand for scalable, professionally managed investment solutions will continue to grow.

“We expect MPS to become an even more integral part of the adviser market in years to come.’’

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