These propositions are often managed by third-party firms and typically provide a standardised discretionary investment solution tailored to an individual’s risk tolerance. For example, a high-risk model portfolio is likely to have a high allocation to equities, while a low-risk one will have a much higher weighting to fixed income.
Many advice firms, both small and large, are faced with regulatory scrutiny and the substantial cost of maintaining individual portfolios for customers and have leapt at the opportunity to outsource their investment processes to model portfolio services (MPSs).
As such, MPSs in the UK are taking on an increasingly massive scale. Consultancy NextWealth’s latest MPS Proposition Comparison Report, published in December, shows they now hold at least £141bn in assets under management, up 36% in the year to the end of September 2024 and nearly double the £77.5bn they held in 2021.
The report, seen in part by the Good Money Guide, also lists the top 10 largest MPS providers. Two firms stand out: Tatton IM and Quilter, which together run £35bn in assets, or almost a quarter of the total, in their main solutions.
Timeline Portfolios also deserve special mention for having more than doubled the assets it manages for more than two years in a row to now run more than £7 billion.
Below we look at all 10 of the UK’s biggest model portfolio services in terms of assets.
1. Tatton Investment Management: £17.6 billion
Founded in 2013, Tatton Investment Management has grown rapidly to rise to the top of the MPS space.
A key draw for advisers has been the provider’s comparatively low management fee of just 0.15% across its portfolios. Its typical ongoing charges figure, including underlying investment instruments, is around 0.54%.
It offers a variety of portfolio types and strategic asset allocations, including ethical, money market, and income options.
2. Quilter WealthSelect: £17.4 billion
Quilter is one of the biggest wealth management firms in the UK, and its WealthSelect portfolios are used by its own advisers as well as third parties.
3. Parmenion Investment Management: £9.4 billion
Parmenion’s core MPS offering consists of five multi-asset portfolios which invest across passive, active, factor, and direct securities.
4. LGT Wealth Management: £8.2 billion
LGT Wealth Management has seen its MPS grow rapidly in recent years to make it a key player in the space. The firm launched an entirely separate internal division for this business in 2022, after it invested heavily in expanding its distribution.
5. Timeline Portfolios: £7.2 billion
Timeline is a relatively new entrant to the MPS space, having launched only in 2020.
Since then it has grown rapidly to become one of the dominant providers in the UK. This has been aided by its competitive fees as well as a strong marketing strategy.
6. RBC Brewin Dolphin: £7.6 billion
RBC Brewin Dolphin’s main MPS has been running since 2008 and posted strong investment returns in recent years, helping it to draw in more money.
7. Schroder Investment Solutions: £4.6 billion
Schroder Investment Solutions has expanded the distribution of its MPS in recent years, contributing to impressive growth.
8. Brooks Macdonald: £4.5 billion
Wealth group Brooks Macdonald’s MPS consists of four ranges: active, passive, responsible, and volatility-managed (a mix of active and passive funds).
9. Financial Express Investments: £3.9 billion
Financial Express has a different background from most other providers on this list, being a data provider rather than a wealth manager. Its MPS is used by more than 400 financial advice firms.
10. Waverton Investment Management: £3.5 billion
Wealth firm Waverton offers five core risk-rated MPS portfolios.
Robin has more than six years of experience as a financial journalist, most of which were spent at Citywire, and covers the latest developments in the investing, trading and currency transfer space. Outside of work, he enjoys reading literature and philosophy and playing the piano.
You can contact Robin at robin@goodmoneyguide.com
