UK advisers insource model portfolios

Mike Taylor

Managing Editor and Publisher

21 March 2024

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.