The increased utilisation of Model Portfolio Services (MPS) is predicted to create significant challenges for investment platforms, according to Equisoft.
- A substantial 69% of UK financial advisers anticipate managing more assets through MPS shortly, sparking concerns about platform capacity.
- The report by Equisoft highlights that more than half of advisers are adopting MPS for the majority of their clients, citing regulatory demands and cost efficiency.
- MPS remains a crucial investment solution as advisers navigate the complexities of rising regulations and market fluctuations.
- With rising reliance on MPS, there are growing fears about whether current platforms can sustain this expansion effectively.
The expected growth of Model Portfolio Services (MPS) could potentially strain the platforms that support them, posits Equisoft. According to recent findings, a notable segment of financial advisers in the UK, about 69%, foresee an expansion in the assets managed via MPS in the foreseeable future. This foresight prompts a necessary conversation about the preparedness and robustness of existing platforms to accommodate such growth.
Furthermore, the report ‘Transforming Investment Management: The Rise and Risks of Model Portfolio Services’ reveals that over 51% of financial advisers are now leveraging MPS for more than half of their clients. This indicates a significant shift towards MPS, driven by factors such as regulatory pressure and cost considerations. The choice of MPS reflects a broader trend of seeking streamlined and efficient investment solutions amidst complex market dynamics.
Equisoft’s report underscores the enduring value of MPS for advisers contending with increasing regulatory requirements and intricate market conditions. This trend underscores the reliance on MPS as a sustainable investment solution, stressing its importance as advisers strive to meet ever-evolving client needs while remaining compliant with regulatory frameworks.
The implications of this shift raise concerns about whether current investment platforms can handle the influx of assets smoothly. As MPS further embeds itself as a preferred approach in wealth management, the ability of platforms to adapt to rising demands without compromising functionality or security is critical. This emerging dilemma invites proactive measures to ensure that platforms do not encounter operational setbacks.
The pressing issue here is whether these platforms possess the scalability and technological infrastructure necessary to support the anticipated surge in MPS usage. As more advisers align their strategies with MPS, the attention shifts to enhancing platform capabilities to prevent a potential ‘crunch’, which could disrupt service delivery and investor confidence.
Ultimately, the projected increase in MPS usage underscores the urgent need for platforms to strengthen their capacities to avert future operational challenges.
