Financial advisers see growth in discretionary managed investment services

The discretionary managed investment service sector is expected to experience significant growth in the next three years, enabling financial advisers to take on more clients and offer existing clients a better service, according to new research* from wealth manager Investec Wealth & Investment (UK) with financial advisers and financial planners across the UK.

More than nine in 10 (98%) IFAs and financial planners say they already use a third-party bespoke discretionary managed investment service for their clients. This means their portfolio is actively managed on a discretionary basis by a third-party wealth manager who runs the day-to-day decision-making on the portfolio, allowing them to respond quickly to market changes or capitalise on opportunities that are in the client’s best interests.

Around two-thirds (61%) of financial advisers say their use of these services has increased over the past five years. Less than a third (31%) say it has stayed the same, and less than one in eight (8%) say it has decreased over the past five years.

The research by Investec Wealth & Investment (UK), which provides products and services to help advisers build a competitive advantage and protect and grow their clients’ wealth, reveals that the vast majority (94%) of financial advisers surveyed expect their use of these services to increase over the next three years. Of these, over a half (52%) expect a dramatic increase.

The most important reason given for this future expected increase is that discretionary managed investment services will enable financial advisers and planners to provide a better service to their clients. This is followed by financial advisers being able to take on more clients, followed by regulatory pressures, and finally followed by making their overall proposition more attractive.

Simon Taylor, head of strategic partnerships at Investec Wealth & Investment (UK), said: “With more and more of advisers’ clients moving into retirement, the associated investment risks that come with that, along with the requirements of Consumer Duty and the FCA’s thematic review of pensions, are putting heightened pressure on advisers.

“The financial adviser and wealth management sector is increasingly finding more ways in which they can offer clients a better, more valuable service – while at the same time taking on more new clients. Our research shows that more and more firms are using third party bespoke discretionary managed investment services to deliver value to clients and free up advisers’ time to take on more new clients.

“Investec’s bespoke discretionary managed investment service is highly flexible and built around a clients’ individual preferences and specific investment goals, meaning advisers can then leave the day-to-day decision-making to us with the peace of mind that their clients’ portfolios are in safe hands.”

Investec Wealth & Investment (UK) offers an award-winning, bespoke discretionary managed investment service which is highly flexible and built around the adviser’s clients’ individual preferences and specific investment goals. It can also be applied to almost any investment structure, including joint or sole accounts, ISAs and trust assets.

Once the adviser has agreed the most suitable mandate with their client, their portfolio will be actively managed on a discretionary basis. This enables advisers to leave the day-to-day decision-making to Investec Wealth & Investment (UK) and allows Investec to respond quickly to market changes or capitalise on opportunities that are in the best interest of the adviser’s client.

Investec Wealth & Investment (UK) offers a number of specialist services within its Bespoke Discretionary Fund Management. This includes the AIM Portfolio IHT Plan, which can reduce the adviser's clients' inheritance tax liability on assets passed onto the next generation and also aims to deliver outstanding long-term performance as well as a Structured Product Service, which gives advisers’ clients the security of a set return over a defined period with a choice of two structured portfolios which have the potential for positive returns in rising, flat or falling markets.

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Notes to Editors

* Investec Wealth & Investment (UK) commissioned independent research agency PureProfile to interview 100 IFAs and financial planners across the UK in January 2024.

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About Investec Wealth & Investment (UK)

As one of the UK’s leading wealth management firms, we are trusted with managing £40.7 billion (as at 31 March 2023) of our clients’ money. Our wealth teams work hard at providing Out of the Ordinary levels of service to our clients and with an investment heritage dating back to 1827, we’re built for the long term.

Investec Wealth & Investment (UK) is a trading name of Investec Wealth & Investment Limited which is a subsidiary of Rathbones Group Plc. Investec Wealth & Investment Limited is authorised and regulated by the Financial Conduct Authority and is registered in England. Registered No. 2122340. Registered Office: 30 Gresham Street. London. EC2V 7QN. Member firm of the London Stock Exchange.