Much is made as to whether model portfolios or multi-asset funds will win out as advisers’ vehicle of choice, but one study has argued the merits of a peaceful coexistence between the two.

In their latest multi-asset distribution report, the team over at Nextwealth have found almost 80 per cent of financial advisers who use discretionary MPS also use multi-asset funds.

Rather than debating the merits of one over the other, the report suggests most advisers value using a combination of strategies to account for the plurality of client needs – one of which is tax efficiency. 

One unnamed head of financial planning said it’s easier to be intentional about how clients use their capital gains tax allowance within the multi-asset structure, as any gains aren’t automatically realised when changing products.

Another adviser said multi-asset funds can move quicker and more nimbly than MPS providers, while also being able to take smaller, more nuanced positions in certain asset classes, such as direct gold. 

This is all interesting stuff, given MPS propositions are the fastest growing segment of the marketplace and have been touted as potential successors to the traditional multi-asset structure. 

In fact, what seems to have happened is that some advisers blend the two products together. Almost half of advisers were found to do this, according to Nextwealth, which has the benefit of extra choice across the investment universe. 

But one interviewee surveyed suggested that blending solutions can lead to over-diversification, pointing out that you may as well go passive at this point.

We’ll be diving into the differences between solutions over the coming weeks, so do stay tuned.