The Quilter platform has seen assets in outsourced investments in DFM (Discretionary Fund Management) models and managed portfolio services soar by 331% since the end of 2020.

At the end of 2024 41.9% of assets managed through the platform were in DFMs and managed portfolio services.

At the end of 2020 outsourced investments accounted for 16.7% of all Quilter platform assets.

The proportion of assets managed on an advisory basis on the Quilter platform has fallen from 28.1% in 2020 to 15.8% at the end of 2024. Total assets run on an advisory basis stagnated in comparison to outsourced assets, with £13.4bn in 2024 compared to £13.9bn in 2020.

Quilter platform assets

Source: Quilter, 24 February 2025

Graham Folley, head of business development and discretionary sales at Quilter, said the platform has gone from three discretionary managers on the platform to over 149.

He called on advisers to make sure they are doing enough due diligence.

He said: “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.

“However, that visibility needs to be properly interrogated, as the growth of MPS has brought about new and possibly unappreciated risks. MPS providers are making greater use of passives to help drive costs lower, but this brings about a latent risk some advisers and their clients are not necessarily aware of.

“With the US making up over 70% of the MSCI World index, and the Magnificent Seven around a quarter, some MPS portfolios are concentrated in a small handful of names and may lead to outcomes that cause some clients discomfort. Given how this would expose clients in a market downturn, as evidenced during 2022’s fixed income struggles, due diligence of the investments, as well as the operations, of an MPS is more vital than ever.”

Less than a third of advisers felt fully supported by their preferred DFM partner last year, according to separate research from Defaqto.

Quality of literature showed the biggest fall in satisfaction, which reflected the introduction of the Consumer Duty regulation and the need for clear and transparent communication.