Discretionary model portfolio services (MPS) have seen a sharp rise in assets over the past year, significantly outpacing growth in underlying platform assets, according to the latest data from NextWealth.
Its bi-annual MPS tracking study shows discretionary MPS assets increased by 11% over the past six months and 25% over the past year.
In contrast, assets on adviser platforms grew just 5.3% year-on-year. Since the end of September 2024, the market for discretionary on-platform MPS has expanded by £15bn.
NextWealth managing director Heather Hopkins said: “The market for discretionary MPS continues to grow, with assets growing faster than underlying platform assets. MPS is not just growing — it’s capturing a bigger slice of the overall pie.”
The report also indicates that sustained fee pressure seen in previous years has begun to ease.
The average total cost to clients, including both MPS fees and ongoing charges (OCFs), has fallen by just four basis points over the past year and remained flat over the past six months.
From 2021 to 2024, the average cost fell from 1% to 0.54%, largely due to greater use of passive investments.
“We’re calling the bottom on fees,” said Hopkins. “While we’ve seen rapid fee declines in recent years, particularly from increased use of passive tracker funds, that downward pressure appears to have stabilised. We expect fees to remain steady over the next two to three years.”
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The latest data also shows a pause in the shift towards passive investing. Assets in passive strategies dipped slightly to 42%, as several fully active DFMs reported strong growth.
Among the top five DFMs by net asset growth over the past six months were Quilter Wealth Select, Tatton, Timeline, Omnis and Brooks Macdonald.
By percentage growth, the leaders were Blackfinch, Marlborough, Aspen, LGIM and Omnis.
Quilter and Tatton now account for a quarter of total market assets. Timeline has also moved into the top five largest providers, joining Parmenion and Brewin Dolphin.
Despite the dominance of a few large players, Hopkins said the market remains “vibrant and competitive”, with a wide range of business models and pricing strategies seeing success — from low-cost passive providers to higher-cost active firms.
For the first time, the June 2025 report includes breakdowns of assets by co-branded, tailored and sub-advised portfolios, unitised models and model portfolio types.
