Five years of MPS: staying true to our DNA

Key takeaways  Model Portfolio Services (MPS) has evolved alongside adviser needs, combining professional investment management with greater efficiency and governance.  We believe a scalable investment process enabled us to extend our multi-asset capabilities into an MPS structure.  As the MPS market matures, differentiation is increasingly driven by investment philosophy, governance and service.

The principles of good investing haven't changed. Advisers still need robust asset allocation, disciplined portfolio construction and effective risk management. What has changed is the environment in which they operate. 

Increasing demands around governance, transparency and consistency have encouraged many firms to adopt a more centralised approach to investment management. Consumer Duty has only reinforced that direction of travel, sharpening the focus on value, outcomes and oversight. Against that backdrop, Model Portfolio Services (MPS) has emerged as a natural response to the changing needs of advisers and their clients.

Multi-asset investing evolves

Multi-asset investing has evolved significantly over the years and while the investment engine has remained largely the same, the delivery mechanism has evolved to better meet the needs of advisers and their clients.

The growth of platforms has been a major catalyst to this evolution. As platform technology improved and investment solutions became more accessible, advisers could implement and manage portfolios in a much more efficient way than was previously possible.

At the same time, advice businesses were changing. Advisers were spending more time on regulatory requirements, client engagement and running their businesses. As a result, many were looking for a more centralised approach to investment management that could deliver consistency while freeing up time to focus on what matters to clients. Meanwhile, fee pressures across traditional fund structures and MPS offered a way of combining professional investment management with a service model that many advisers found attractive. 

Meeting adviser needs 

As an asset allocation team, we pride ourselves on innovation and adapting to changes in the market. Back in 2013, we launched our Multi-Index range in the years following the Retail Distribution Review. At the time, it offered something different to many of the solutions available in the market and reflected our belief that advisers were looking for accessible, risk-targeted multi-asset portfolios at a competitive cost.

On the back of the success of our Multi-Index range, the conversations we were having with advisers evolved. What stood out was that many clients valued our investment approach but wanted access to it through an MPS structure. They were looking for greater flexibility, scalability and governance within their existing advice models.

Utilising a central investment process meant that we could lean on this heavily without the need to build significant infrastructure from scratch to be successful in MPS. We already had a well-established asset allocation framework, a proven investment process and the governance structures required to manage portfolios effectively. On this foundation, we launched our MPS offering in 2021.

Building on our multi-asset heritage 

One thing we were clear about from the outset was that our MPS proposition needed to feel like a natural extension of our multi-asset business. We didn't want to create something that sat separately from the investment philosophy that had served our clients for many years.

That's why our MPS portfolios are designed and managed by the same asset allocation team, why they are built using the same investment philosophy that underpins our broader multi-asset capabilities, and why we've remained committed to delivering a cost-effective solution focused on client outcomes.

Our ambition in MPS is no different from our ambition elsewhere in multi-asset investing: to build long-term partnerships with advisers and help them meet the needs of their clients.

The scale of our business is also an important advantage. As the UK’s largest asset manager, we draw on expertise from across the organisation, learn from different parts of the business and apply those insights to enhance the service we offer advisers.

We believe our combination of multi-asset heritage, asset allocation expertise and MPS experience provide advisers with an alternative approach within the market. Our proposition is built on a long-standing multi-asset heritage, supported by a recognised UK investment brand and shaped by a simple objective: putting clients first.

Our next article in our MPS 5-Year anniversary series will cover how we are innovating today.

 

The value of an investment and any income taken from it is not guaranteed and can go down as well as up, and the investor may get back less than the original amount invested. It should be noted that diversification is no guarantee against a loss in a declining market.