Advisers increasingly want managed portfolios where the tough work is done for them as their time is “becoming a scarce resource”, according to Defaqto’s insight manager Andy Parsons.
His comments come as the adviser software company revealed the most popular managed portfolio solutions in the first quarter of 2024.
Parsons said advisers face an ever-increasing regulatory workload so expect an MPS that delivers.
Tatton Core Active jumped to the top of the table after being the sixth most popular investment management solution in 2023, while Tatton Core Balanced moved up one place on the table to second.
The firm's tracker balanced also entered the top 10 at number eight.
Timeline Tracker 50 came in third and soared into the top three from way down the board - it ended 2023 as the 56th most popular.
The most recommended solution in 2023, Timeline Classic 50 dropped four places to fifth.
Overall, the first quarter of 2024 saw four new entrants appear, with the most notable climber being Rockhold Active Adventurous which soared 199 places up the table to sixth position.
Managed portfolios on the rise
Parsons said the latest data from Defaqto Engage showed a variety of investment solutions across different styles and risk levels.
He anticipated the popularity of MPS's will continue to rise, particularly as advisers have to spend more time battling with regulation.
He said: "In an advisory world, where time is becoming an even scarcer resource, due to an ever-increasing regulatory workload, clients rightly expect investment solutions that deliver in terms of associated risk, performance, and cost.
"Advisers are understandably seeking out investment solutions where all the tough challenges of asset allocation, geographical and sector preference, growth versus value and mega cap versus small is done for them.
“The expansion of the MPS arena will undoubtedly continue throughout 2024 and its important that advisers are assisted in their decision making, due diligence and comparisons of potential solutions.”
Defaqto Engage is understood to be used by 30 per cent of advisers and includes data on more than 2,700 MPS solutions.
Last month, Justine Randall, chief commercial officer at Tatton Investment Management, told FT Adviser model portfolio services achieve the same goals as bespoke discretionary management but at a lower cost.
Randall also argued MPS offers reduced risk and complexity for advisers and their clients.
She said: “It’s hard being an adviser in today’s landscape and outsourcing to MPS allows advisers to focus on client needs and allows us to focus on the investment management.
"This client-centric approach allows adviser to spend more time with their clients and have the utmost confidence we will focus on investment returns at the right price.”
tara.o'connor@ft.com
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