Defaqto has launched MPS Comparator, a performance comparison tool for managed portfolio services.
The market intelligence firm said it is the first service available in the UK that enables comparison of like-for-like portfolios across the whole market.
Defaqto said MPS Comparator will make it easy for advisers to assess portfolio performance and for providers to differentiate their offerings. It will also assist in handling regulatory responsibilities, such as Consumer Duty requirements.
The service allows advisers to compare an MPS portfolio’s various metrics to the average of all those that have similar characteristics in terms of realised volatility and asset allocation.
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The firm noted the fast growth in MPS assets seen recently, with the total climbing 14% from about £75.4bn at the end of 2022 to £85.8bn at the end of 2023.
Defaqto’s DFM coverage spans over 120 DFMs and about 2,700 portfolios, providing data such as performance, fees, and asset allocation.
Chief executive John Milliken, said: “Our new service is set to be a game-changer for MPS. This is another example of how we’re supporting advisers and their clients to make smarter financial decisions, helping improve adviser efficiency when assessing value and addressing regulatory obligations.
“For MPS providers, the performance comparators we’ve designed will offer competitor insight that we believe will become intrinsic to increasing assets under management.”
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“With this solution, advisers will be able to access Defaqto’s in-depth data analysis, allowing them to accurately compare like for like MPS propositions and make smarter recommendations. With closer scrutiny of key performance metrics and asset allocation, they can demonstrate best practice, enhance their due diligence and fulfil Consumer Duty requirements.
Andy Parsons (pictured), insight manager for investments at Defaqto, added: “With MPS Comparator, we’re enabling smarter distribution. Currently, DFM asset managers choose between IA sectors, CPI + or other industry Indices to compare their MPS portfolios against.
“These don’t provide an appropriate comparison when assessing, comparing, and showcasing the performance of a portfolio. From a Consumer Duty perspective, advisers and clients could be misled in terms of performance comparison.”
