This is a marketing communication and for Professional Investors only.
In this article Henry Wilson, Partner & MPS Team Head, discusses how bespoke model portfolios can improve efficiency while helping advisers retain control.
As firms adopt technology and AI tools to improve efficiency across their advice businesses, many are reassessing whether maintaining a resource-heavy in-house investment function still makes strategic sense. Running advisory models internally can be effective, but it can also be demanding, particularly as firms grow, regulation evolves and client expectations continue to rise.
We believe the conversation is no longer simply about outsourcing investment management. Instead, it is about how firms can insource specialist investment expertise, operational support and governance in a way that strengthens their own proposition without giving up control.
For us, bespoke model portfolios are most effective when they are built as a genuine partnership. This is not about handing over an investment proposition. It is about enhancing it with the right infrastructure, oversight and day-to-day support, while allowing the advisory firm to remain at the centre of the client relationship.
The issue is rarely just portfolio design. More often, it is everything that surrounds it: governance, committee structures, research, implementation, rebalancing, administration, client communications and regulatory oversight.
As firms scale, these operational demands can become harder to manage consistently and more costly to maintain. A bespoke model portfolio service managed on a discretionary basis can help relieve that burden, while still allowing the advisory firm to retain ownership of its brand, client relationships, risk profiling approach and investment mandate.
That distinction matters. We see our role not as replacing an adviser’s investment proposition, but as providing the infrastructure and expertise needed to help deliver it more efficiently and more consistently.
There is also a broader commercial consideration. As firms think more carefully about succession, acquisition readiness and long-term scalability, many are looking to build investment propositions that are less dependent on a small number of key individuals and more institutionalised in structure. A more robust and scalable operating model can also help enhance the long-term value of the firm. For many, that is part of the rationale for adopting a bespoke MPS partnership.
At the heart of the partnership is a Joint Investment Committee, which brings together members of the adviser firm and our team. Together, we shape a bespoke range of model portfolios around the adviser’s client base, preferred parameters and overall investment philosophy.
The starting point is always the adviser firm. We work closely with each business to understand how it operates, what matters most to its clients and how its investment philosophy should be reflected in the mandate. That may include volatility controls, asset allocation constraints, benchmarks or cost parameters. The portfolios are then built specifically for that firm and its clients.
Advisers are not left to manage the process alone. We contribute our fund research and portfolio management expertise, and all decisions are documented through a formal committee structure. Meetings are typically held quarterly, with the flexibility to make tactical changes when required.
One of the clearest benefits of this approach is the reduction in day-to-day operational complexity.
We take responsibility for the ongoing management of the portfolios, including ongoing monitoring, quarterly rebalancing and the implementation of agreed changes. That means advisers no longer need to run multiple model updates manually or manage the same level of operational complexity internally. This approach also helps with reporting consistent performance data to clients.
We also support firms through the practicalities of implementation. That includes working across a broad range of platforms, helping back-office and paraplanning teams understand how to use the model range, supporting risk profiler mapping where needed, and providing training on how to integrate the portfolios into a firm’s advice and suitability framework.
In other words, the support is not only strategic; it is operational and hands-on.
In our view, a successful partnership goes beyond investment management alone.
Clear communication is a vital part of helping firms explain a bespoke proposition to clients. We support adviser firms with a broad range of client - and adviser-facing materials, including bespoke factsheets, quarterly investment reports, brochures, video content, weekly market updates and snapshot articles.
We also help firms think about the wider communications strategy around the proposition, including co-branded collateral, website content, social media and client events. That support can play an important role in helping advisers explain any transition, reinforce their value and present the proposition in a way that feels consistent with their own brand.
Governance and regulation support is core to the appeal of a bespoke service to financial advisers. Under Consumer Duty, many are looking closely at how they can evidence oversight, articulate value and ensure their investment proposition remains aligned to the needs of their target market.
We provide specialist support here too, including access to technical expertise, training and help with the governance framework that sits around the bespoke service.
The adviser retains responsibility for the client relationship and suitability. Our role is to provide the investment management, operational support and governance structure that helps them deliver that more effectively.
For firms looking to modernise their proposition without losing control, that combination is becoming increasingly compelling. Bespoke Model Portfolios are not simply a way to delegate investment management. Done well, they can help firms build a stronger, more scalable and more resilient advice business.
This communication is provided for information purposes only. The information presented herein provides a general update on market conditions and is not intended and should not be construed as an offer, invitation, solicitation or recommendation to buy or sell any specific investment or participate in any investment (or other) strategy. The subject of the communication is not a regulated investment. Past performance is not an indication of future performance and the value of investments and the income derived from them may fluctuate and you may not receive back the amount you originally invest. Although this document has been prepared on the basis of information we believe to be reliable, LGT Wealth Management UK LLP gives no representation or warranty in relation to the accuracy or completeness of the information presented herein. The information presented herein does not provide sufficient information on which to make an informed investment decision. No liability is accepted whatsoever by LGT Wealth Management UK LLP, employees and associated companies for any direct or consequential loss arising from this document.
LGT Wealth Management UK LLP is authorised and regulated by the Financial Conduct Authority in the United Kingdom.
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