Nextwealth’s latest MPS comparison report has landed in our inboxes, and there’ll be no prizes for guessing which three firms in particular are hoovering up the lion’s share of assets.
Quilter, Tatton, and Timeline have added a combined £4bn to their asset base in the six months since Nextwealth’s analysts last ran the numbers in December 2023.
Year-to-date, the trio have added over £10.5bn all together, while the remaining 48 DFMs surveyed mustered up £14.4bn between them.
Indeed the report says that their growth has dwarfed that of other DFMs and points to potential ‘future dominance’ of the MPS market.
Tatton and Quilter are already at the top of the tree - the former probably because of its track record for being lower cost, the latter of these no doubt benefitting in part from its distribution capabilities. Only Parmenion, LGT and Brewin Dolphin stand between Timeline joining them.
In order for Timeline to do so, they will have to keep up the extraordinary growth - 147 per cent between Q1 2023 and Q1 2024 - they have seen in recent months.
Is this level of growth sustainable? Timeline is launching an adviser platform, so it obviously thinks so. And 39 per cent of financial advisers told NextWealth's recent survey that they plan to increase their use of discretionary MPS in the next three years. So there may well be scope to keep growing.
What else did we learn?
Well, flows continue to point in the direction of passive, in part down to consumer duty and the associated fee pressures pinching the industry.
"We are able to quantify a 14 per cent shift in the asset-weighted allocation from active to passive funds over the last 18 months,” said Heather Hopkins, managing director of Nextwealth.
"In the last year, 56 per cent of DFMs have increased weighting to passive instruments while only three have increased their weighting to active. The average across the industry is also influenced by the strong growth from DFMs that invest solely in passive."
While passive offerings remain cheaper, the report also noted that blended solutions tend to more closely resemble active solutions in terms of cost, suggesting that they’re more akin to active than to passive.
And finally, here’s the league table of AUM:
- Tatton Investment Management £15,300,000,000
- Quilter WealthSelect £15,268,730,593
- Parmenion Investment Management £8,980,000,000
- LGT Wealth Management £7,991,521,282
- RBC Brewin Dolphin £7,130,684,176
- Timeline Portfolios £5,244,336,454
- Schroder Investment Solutions £4,739,127,152
- Brooks Macdonald Asset Management £4,163,467,856
- Financial Express Investments £3,954,532,053 -
- Omnis Investments £2,829,335,493
