64% of managed portfolio service launches are on adviser platform rather than direct with the discretionary manager

17 October 2016

Latest independent research released by Defaqto today shows that the launch of platform hosted managed portfolio service solutions has, over the last five years, exceeded launches with discretionary manager custody. Defaqto has registered some 42 new platform hosted solutions against 24 discretionary manager custody solutions.

In addition, the last year has been relatively quiet in terms of corporate activity, but what activity there has been seems to point to an increasing trend of putting the pieces of a jigsaw together to achieve vertical integration across the distribution chain. This includes adviser businesses, platform, product and discretionary managers.

Fraser Donaldson, Insight Analyst - Funds and DFM at Defaqto, says:

"I think that all the evidence points to a change in the investment landscape. Increasing numbers of platform solutions suggests two things. Firstly, discretionary managers have, possibly reluctantly, accepted that to succeed in asset gathering in the retail financial adviser market they will have to make their solutions available on adviser platforms and this means giving up custody of assets to the platforms.

Secondly, these figures further underline the importance of platforms to the adviser market, particularly as a hub for all their investment management and administration. This may also explain the slow march to vertical integration as bigger entities wish to retain control of all links in the distribution chain."

Defaqto's DFM market update is accredited for up to 60 minutes of CPD. It informs advisers about outsourcing to a discretionary manager and helps them to keep up to date with this growing area of investment.

The publication is free to download at defaqto.com/advisers/resources/publications-list/dfm-market-update-2016/