Outsourced investments have soared in popularity over the last five years, according to new data from Quilter.

The wealth management suggested that adviser appetite to run their own portfolios has “waned significantly”.

At the end of 2020, outsourced investments in DFM models and managed portfolio services stood at 16.7% of all platform assets. Today, that figure is standing at 41.9%, with the total amount of assets in these soaring 331% over the same period.

By contrast, the proportion of assets still managed on an advisory basis on the Quilter platform has fallen sharply – standing at 28.1% in 2020 compared to 15.8% today. Quilter said that the total assets run on an advisory basis has stagnated in comparison to outsourced assets, with just £13.4bn today, compared to £13.9bn in 2020.

Head of business development and discretionary sales at Quilter, Graham Folley, said that recent MPS growth had been “nothing short of phenomenal”.

“In 2014, we had only three discretionary managers with model portfolios on the platform with assets around £350m,” Folley said. “That number now stands at 149, representing over 3,000 portfolios and close to £18bn in assets under management, excluding our own WealthSelect managed portfolio service.

“The trend is clear and adviser appetite to administer advisory model portfolios has markedly diminished. Clients and advisers clearly like the visibility of both the activity and the investments that an MPS provides, and coupled with the downward pressure on fees, they are fast becoming the preferred way to implement the investment means of a financial plan.”

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