The launch of platform-hosted managed portfolio services (MPSs) has exceeded those with discretionary manager custody over the past five years, according to Defaqto.
The financial information business said it had registered 42 new platform-hosted MPS offerings in that period, compared with 24 discretionary custody solutions.
Defaqto insight analyst - funds and DFM Fraser Donaldson (pictured) attributed the trend largely to price, pointing out the platform option is cheaper for both advisers and their clients.
He said: "In general, discretionary managers range from providing a premium, bespoke service to a gradually less individually-driven one. The MPS is a viable and good solution for a lot of people, but you don't have the level of personalisation you do for other things That is why it is offered at a lower price."
According to Donaldson, the increasing numbers of platform solutions suggests two developments. "First, discretionary managers have - possibly reluctantly - accepted that to succeed in asset gathering in the retail financial adviser market they will have to make their solutions available on adviser platforms and this means giving up custody of assets to the platforms," he said.
"Second, these figures further underline the importance of platforms to the adviser market - particularly as a hub for all their investment management and administration. This may also explain the slow march to vertical integration as bigger entities wish to retain control of all links in the distribution chain."
Defaqto's DFM market update , which aims to inform advisers about outsourcing to a discretionary manager, is accredited for up to 60 minutes of CPD and can be downloaded free here.
The chairman worries about finance getting in touch with its feelings
Cost of acquisition: £31m
Greg Camm temporary replacement
Plan ahead … do not rush
Adviser use of social media on the up