MPS vs Multi-Asset - is there a difference?
MPS vs Multi-Asset - is there a difference?
Introduction
RDR, Mifid II & The Consumer Duty has seen more Financial Advisers in the UK outsource their Investment Proposition to third-party Managed Portfolio Service (MPS) providers.
The MPS market now stands at ￡103.5 billion representing 11.5% of the total ￡898 billion Wealth Management Market.*
However, MPS is not the only way advisers can access risk profiled multi-asset investment for their clients. MPS’ older cousin the multi-asset, multi-manager fund still takes a fair share of inflows.
As the MPS market has matured over the last ten years, the overall cost of MPS vs the most popular multi-asset multi-manager is very similar. The overall outcome from performance perspective similar too, I often get asked – What is the difference between the two, and why would you use one over the other?
What is the difference?
If we held the exact same investment strategy and underlying investments in an MPS and Multi-Asset Fund, ultimately the client would get very similar if not the same returns and outcome.
If we ignore all the practical differences like transparency of holdings, FCSC protection, Capital Gains Tax Management, Income payments, platform availability, responsibility of suitability to name but a few... some of which might be more or less important to the individual client, then for me the clue is in the name – Model Portfolio Service..
Ultimately it comes down to a couple of nuanced differences between the MPS & Multi Asset fund and the service that can be provided to the adviser and the end client.
Multi-Asset
When an adviser recommends a Multi-asset fund, the investment manager has no knowledge or detail of whom the end investor is, and in some platforms case, who the recommending adviser is too.
Therefore other than being able to provide a factsheet on the website, or the odd annual investment update – it is nye on impossible for the investment manager to provide any real specific service to the adviser or the end investor. Now in many cases that is the most appropriate solution for adviser and end client but there is another way.
MPS
When an MPS is working on a ‘reliance on others’ basis the MPS receives the client level details of who the underlying client and adviser are, provided by the platform. The key here is to use an MPS service that does not have inhouse advisers and does not compete.
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This data can then be combined with proprietary Portal software to enable an adviser to build an ongoing servicing proposition using client level Weekly, Monthly and Quarterly reports as well as portfolio specific videos provided by their MPS.
The said Portal can then be programmed on a client-by-client basis by the adviser to send any of the above literature, in any combination ensuring the client is informed of changes to their portfolio, kept up to date with the latest Referendums and Proxy Wars, ensuring they remain calm in times of volatility.
Ultimately the added service from the MPS can allow the adviser to have extra touch points with their clients throughout the year, professionalising their investment content and allowing them to focus on the Financial Planning.
How can we help?
Tatton are the largest MPS provider in UK with over ￡13 billion of Assets Under Management, proudly partnering with over 850 IFA businesses. We provide both Multi-Asset and MPS and are well established to be able to support the ongoing service advisers can provide to their clients.
We have no minimum investment size and can be accessed across 22 different platforms.
If you are an Adviser and interested in finding out how Tatton Investment Management Limited can enhance the investment and marketing service you provide to your clients then please contact me.
Ryan Seaton
07825 613 010
*Platforum - UK Wealth Management: Platform MPS, July 2023
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10 个月Ryan, thanks for sharing!