A survey from intermediary database provider Equifax Touchstone found 76% of advisers use model portfolios, with 70% of that group using the standardised portfolios for more than half of all investment business.
It also found 82% of advisers have a centralised investment process, showing adoption of centralised and standardised investments is now common practice in the UK.
The findings varied by firm however, with small firms of fewer than five advisers far less likely to use model portfolios than large firms with 50 or more advisers.
Industry shift
John Driscoll, director at Equifax Touchstone, said: “Centralised processes and the use of model portfolios ensure that a client’s attitude to risk is reflected and maintained on an ongoing basis, as these portfolios are managed according to strict risk criteria, and re-balanced regularly.
“We’re witnessing a shift to a more structured investment process, with centralised processes a key foundation for investment advice. This approach helps strike the right balance between risk and return, particularly important in a world of increased market volatility.”
Active boost
While the growth of passive vehicles has gripped headlines, the survey of some 141 investment advisers found an ongoing preference for active investments.
Passive investing played a part in 82% of advisers’ investments, but only on a small scale with just 25% of advisers’ investment business in passive instruments.
Only 11% of advisers allocated more than 50% of their business to passive funds.
