Advisers treat platform and MPS as one system, Morningstar Wealth finds

Advisers are increasingly viewing platforms and managed portfolio services (MPS) as a single operating system for delivering advice, rather than as separate service choices, Morningstar Wealth has found.

The firm has collaborated with the lang cat to explore how effectively platforms and MPS work together, and why that alignment is becoming critical for financial advisers.

The firms' survey of over 180 advice professionals found that 82 per cent said they centralised investment proposition (CIP) capability is very important when selecting or reviewing platforms.

Morningstar Wealth and the lang cat said this suggests a link between MPS usage and better alignment with retirement income strategies.

The research found that advisers were happier with the alignment between their CIP and platform where they used an MPS for clients.

The report, 'Unlocking the next phase of MPS growth: connecting platforms and MPS more effectively', showed the MPS market has grown substantially in recent years as confidence remains strong.

Among the advisers who already use MPS for most clients, 81 per cent anticipate further increase in usage.

Of all the advisers surveyed, 46 per cent expect further growth in MPS usage, and of these, 27 per cent expect material growth and 19 per cent expect some growth.

Just three per cent expect a decline in MPS usage.

Head of proposition (EMEA) at Morningstar Wealth, Steve Owen, stated: "A consistent theme in the research is that advisers do not experience platform and MPS as separate decisions, but as one system. Where platforms still run MPS as a collection of separate parts, it becomes harder for firms to explain what they are recommending, harder to report on outcomes, and harder to evidence decisions within a CIP – often generating unhelpful ‘paperwork’ along the way.

"In practice, advisers are recommending an MPS solution, not the underlying holdings. How well that recommendation works day-to-day is shaped by platform capability, governance and reporting, rather than by portfolio design alone."

Insight director at the lang car, Steve Nelson, added: "We wanted to get beyond the typical first order MPS debate (adoption charts, cost comparisons and performance headlines and the like) and look at what MPS usage really means inside advice firms day to day. We dug into what determines whether it feels like an enabler or a constraint for advice businesses, and how much the platform affects it in the adviser CIP."

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