Bespoke portfolios built in partnership with wealth managers are becoming a ‘third option’ for managing clients’ investments, according to research from Copia Capital.
Copia noted outsourced managed portfolio services (MPS) are the main model for central investment propositions (CIPs), with almost two-thirds (63%) of firms now predominantly using them, and only 23% mostly managing portfolios in-house.
Behind these two approaches, the third option of using a bespoke approach with a third party wealth manager is up to 8% of advice firms.
This rises to 23% among firms with assets under management of £500m to £999m.
Researchers found just under half of all firms (42%) could see bespoke models forming part of their CIP within 10 years.
The research was conducted with 182 advice professionals and forms part of Copia’s latest CIP report with the Lang Cat, titled Centralised Investment Propositions 2026: Tuning the engine for growth.
The wider report shows a significant move to outsourcing over the last four years. Copia’s first CIP report in 2022 found that 51% of firms mainly managed portfolios in-house, while 38% predominantly outsourced to MPS providers,
This rose to 55% outsourcing and 34% in-house by 2024. Three-quarters (76%) expect outsourced MPS to form part of their CIP over the next decade.
The move away from in-house management has been driven by growing governance and operational demands.
See also: MPS growth driven by clients’ desire to manage market volatility
Almost nine out of 10 (87%) firms now have a documented CIP policy, three-quarters (74%) operate a formal ongoing monitoring process for their CIP and 66% have documented provider due diligence frameworks in place.
Gary Stirrup, director of sales at Copia, said, “For a long time the choice was framed as in-house or outsourced, with bespoke sitting somewhere in the middle as a niche option. The high number of firms expecting to use bespoke in the next few years shows this is changing.
“Firms increasingly want a partnership approach where advisers can work closely with a discretionary fund manager to build bespoke solutions aligned to their own investment philosophy, target market and client needs.
“It gives them the discipline and resource of a DFM while keeping their own thinking at the centre of how portfolios are built.
“Those considering bespoke are often large enough to want portfolios that reflect their own investment thinking, but without the scale to recruit investment and operational specialists to run money entirely in-house.”
