UK advisers insource model portfolios

Financial advisers in the United Kingdom are increasingly insourcing their model portfolio needs, according to ISS Market Intelligence, with insourced solutions now accounting for 60% of sales.

The ISS Market Intelligence Report released this week looked at trends in the UK model portfolio market across 2023 and reported that model portfolio sales comprised 53% of all investment fund sales in the second half of the years.

It said advisers were increasingly insourcing their model portfolios, with insourced solutions accounting for 60% of sales but noting that there had also been an expansion in outsourcing 9% of advice firms using five or more model portfolio providers.

The report said passive funds had also made considerable gains, representing 37% of gross investment fund sales by the end of the fourth quarter.

“Notably, passive fund accounted for the majority of the twenty best-selling funds and were concentrated among a few fund managers,” the ISS report said.

The report analysed the best-selling model providers and fund managers by six-month model gross sales. On that basis, the best-selling model providers between July 1, 2023, and January 1, 2024, were found to be:

1. Tatton
2. Quilter
3. Financial Express
4. LGT
5. Timeline Portfolios

The report found the best-selling fund managers for the same period, also by gross sales, to be:

1. Vanguard Asset Management
2. BlackRock Investment Management
3. Legal & General Investment Management
4. Tatton Investment Management
5. Quilter Investors
6. Fidelity International
7. Royal London Asset Management
8. HSBC Global Asset Management
9. M&G Investments
10. Dimensional Fund Advisors

Commenting on the report, ISS Market Intelligence EMEA Associate Director, Benjamin Reed-Hurwitz said 2023 was another transformative year for the U.K. model portfolio market, with significant shifts in adviser preferences and the rise of passive funds.