ARC Research has launched ARC Managed Platform Solutions (MPS) Indices to give financial advisers “clarity” on the performance of MPS managers.
The indices are to be launched in Q2 2025 and will include model portfolios on adviser platforms together with funds that mirror MPS strategies.
ARC MPS Indices will be free to access for IFAs.
Over the past 20 years, the ARC Research Private Client Indices (PCI) has become the “benchmark for the private wealth industry in understanding investment performance”.
ARC Research said by “using its expertise in performance analytics, it is following suit with robust and trusted MPS Indices for financial advisers, building a universal-standard comparator index series for MPS solutions”.
The provider of peer group performance analytics explained that this launch coincides with the continued growth of the MPS market.
Over a third of independent financial advisers (IFA) firms rely on MPS for most or all their clients.
Numerous IFAs used the ARC PCI as a proxy for comparison against model portfolio solutions, but “there are distinct differences between the two”.
The new MPS Indices will give IFAs a “more accurate and appropriate reflection of a solution’s performance against its peers”.
The ARC PCI shows net of all fees and the average investor performance outcome. However, the MPS Indices will show targeted outcomes from an investment strategy accessible on a platform.
The Indices will be net of investment fees such as investment management charges and underlying instrument costs, but will exclude platform and adviser charges.
The new Indices will be asset allocation-based rather than risk-based like the ARC PCI. ARC said: “Advisers want to look at expected outcomes based on an asset allocation. The indices will be net of manager fees based on the most used platform.”
The Indices will launch with approximately 500 models from more than 70 investment managers and will initially be calculated quarterly, with monthly and daily estimates.
ARC Research managing director Dan Hurdley said: “The MPS sector has matured enough to warrant its own dedicated index series that reflects its unique characteristics, distinguishing it from private client discretionary services.
“Demand is growing for more specific data, particularly from the IFA community, and while the ARC PCI has always been a good proxy, there are differences.
“Given our position as the leading provider of robust and trusted performance comparators, we believe we are well-placed to launch a new series alongside the other ARC Wealth Indices.
“Working closely with MPS providers, it’s a series that we believe can become the benchmark for comparing MPS performance.”
