As younger, values-driven investors seek personalised options, it might seem surprising that Model Portfolio Services (MPS) are becoming so popular. Yet, UK MPS assets under management surged past £140 billion last year, with adoption accelerating among advisers seeking scalable, compliant investment solutions.

So, how do we reconcile the rise of standardised portfolios with the growing demand for tailored, meaningful investment experiences? The reason is that MPS has evolved from simple, standard products to flexible frameworks, influenced by regulations and the changing needs of younger clients.

Efficiency Meets Expectation: The MPS Boom

MPS was created to make investment management easier by providing ready-made portfolios that match specific risk levels. For advisers, they deliver cost efficiency, consistency, and regulatory simplicity. For clients, they provide access to institutional-grade investment management—without the premium of bespoke discretionary services.

But the appeal of MPS now extends far beyond convenience. Leading providers are innovating with:

• Aligning with macro trends or client interests (e.g. climate transition, AI, healthcare innovation).
• ESG integration that moves beyond just excluding certain investments and focuses on actively managing investments using specific criteria.
• Digital interfaces that enable advisers to deliver a more personalised experience—without sacrificing the benefits of scale.

This evolution reflects a broader industry shift: from product-centric to experience-centric advice. MPS are no longer static solutions—they are dynamic components within a wider advice ecosystem.

Developing the technology and business solutions to provide the services and integrations to provide the features and touchpoints needs to be based on a consistent operating model, aligned to business processes and customer journeys. Often, at Simplify, we work across businesses to develop the capabilities, structure and processes that facilitate the delivery of the technology and product requirements. Without this consistency, businesses find that they are not able to meet client expectations in an efficient manner.

The Personalisation Paradox

Millennials and Gen Z are reshaping the advice landscape. They want portfolios that reflect their values, goals, and life stages. They expect transparency, digital access, whilst supporting their investment goals, often with a focus on ethical investment. And they are more likely to switch providers if their expectations aren’t met.

At first glance, this seems at odds with the standardised nature of MPS. But the industry is responding with agility. Many providers now offer:

• ESG and impact-focused portfolios tailored to ethical preferences and sustainability goals.
• Risk-based segmentation that aligns with specific client objectives (e.g. retirement, home purchase, education funding).
• Platform integrations that allow advisers to combine MPS with tax wrappers, cash flow modelling, and holistic financial planning.

In this way, MPS is evolving into modular building blocks within a broader, personalised financial plan. Advisers are no longer just portfolio constructors—and can focus more of their time on the needs and experiences of their clients.

Regulatory Spotlight: FCA’s Review of MPS

The rapid growth of MPS has not gone unnoticed by regulators. the FCA have announced a review of Model Portfolio Services, with a particular focus on how they align with the principles of Consumer Duty.

The review will examine:

• Whether MPS are delivering fair value to clients.
• How well firms are communicating the nature and risks of MPS.
• The oversight and governance of third-party fund managers.
• The suitability of MPS for different client segments, especially under the lens of good client outcomes.

The FCA is indicating that companies must show that MPS actively benefit clients, not just meet basic regulatory requirements. For MPS, this means:

• Justifying the cost and value of portfolios in a transparent, evidence-based way.
• Ensuring clients understand how MPS differ from bespoke or passive strategies.
• Demonstrating that MPS is being used appropriately and transparently across different client segments.

Firms that fail to be clear and consistent in how they are achieving the outcomes of Consumer Duty risk falling short of both regulatory and client expectations. At Simplify, we find that there is often a lack of structure around Risk Management and Controls in place to allow firms to clearly articulate how they are delivering their Consumer Duty requirements. With an increase in outsourcing MPS outside of adviser firms, this becomes more complex, but of equal importance. We work with firms to develop the governance and oversight model that can be comprehensive and proportional to the risk associated with the product and service.

Implications for Advisers and Providers

The combination of stricter regulations and changing client demographics is both a challenge and an opportunity for the wealth management industry. Advisers must:

• Reassess how they position MPS within the advice process—not as a one-size-fits-all solution, but as a flexible core around which personalisation can be built.
• Address the needs of clients planning for inter-generational wealth transfer, ensuring that their financial plans are robust and adaptable.
• Use technology to enhance client engagement, from onboarding to ongoing reviews.
• Engage clients in values-based conversations that go beyond performance and into purpose.

Providers must:

• Innovate with flexible, values-aligned MPS offerings that can be tailored without compromising efficiency.
• Enhance transparency and reporting, particularly around ESG metrics and cost/value assessments.
• Support advisers with tools that enable modular, client-centric planning, including integrations with financial planning software and client portals.

Looking Ahead: Scale with Soul

The future of MPS isn’t about choosing between standardisation and personalisation—it’s about blending both. As the FCA sharpens its focus and younger investors demand more from their financial partners, the firms that succeed will be those that can scale with soul: delivering efficient, compliant solutions that still feel deeply personal.

To achieve this scalability, firms need to understand how the operating model will deliver efficiency as well as the flexibility required for modern clients. We help clients create highly efficient, straight through, investment journeys for their customers and advisers, by identifying and implementing technology solutions and embedding business process excellence. Talk to us today about how we can support to define and accelerate your journey in delivering solutions and services that meet your business objectives, and align to the needs of your clients.

In this new era, MPS are not the end of personalisation—they’re the foundation on which it’s built.

Dom House

Head of Frameworks