Multi-asset net sales show resilience in H2 2025 as net MPS sales slow

Multi-asset net sales were “remarkably resilient” in the second half of 2025 despite the struggles seen in the broader retail investment market, data from ISS Market Intelligence (MI) has revealed.

Its latest Portfolio Construction report showed that total net model portfolio service (MPS) sales fell from £8.1bn in the first half of 2025 to £7.6bn in H2.

Unitised multi-asset funds saw positive net sales in 2025, although sales slowed from £1.1bn in H1 to £1bn in the second half of the year.

Meanwhile, single strategy funds selected by advisers experienced accelerated outflows, rising from £3.4bn in H1 to £5.4bn in H2 2025.

MPS remained the dominant solution type in the second half of 2025, accounting for 46 per cent of gross independent financial adviser platform sales, compared to 20 per cent for unitised multi-asset funds and 34 per cent for adviser-managed solutions.

Although MPS continued to dominate, ISS MI noted that these flows were driven by around 2,100 of the largest users, defined as adviser firms where MPS accounted for more than 50 per cent of their investment fund gross sales.

“The dominance of model portfolios continued in the second half of 2025,” commented ISS MI head of research development, EMEA & North America, Benjamin Reed-Hurwitz.

“But as is always the case, the headline numbers only tell part of the story. When looking more closely, what we see is a highly segmented adviser landscape, where a relatively small group of ‘power users’ are driving a disproportionate share of both gross and net flows, particularly in the case of MPS.”

Among these MPS ‘power users’, net sales for MPS were nearly £6.5bn, while net flows were almost £5bn out of other investment products.

“This transition of existing books of business towards MPS is fuelling strong MPS net sales but will not continue forever,” Reed-Hurwitz said.

“While we may not have reached peak MPS, we are closer to the summit than base camp.

“At the same time, there remains a committed audience for unitised multi-asset and even single strategy funds, despite the broader trend of outflows.

“There isn’t a single ‘adviser market’ anymore – there are multiple distinct segments, each with their own preferences, behaviours and product needs.

“The ability to identify and serve those segments is increasingly what separates successful investment fund sales strategies from those that struggle.”

ISS MI stated that, alongside this growing segmentation, cost was emerging as the defining factor in portfolio construction.

The average sales-weighted ongoing charge figure (OCF) for funds sold within MPS was 36 basis points in the year to the end of 2025.

More than a third (37 per cent) of MPS solution sales were sold as part of portfolios that had an average underlying OCF of 30 basis points or under last year.

Over half (55 per cent) of sales were in portfolios with an average underlying fund OCF of between 31 and 60 basis points.

Unitised multi-asset funds sold through platforms carried a sales-weighted average OCF, which included portfolio management fees and underlying fund costs, of 47 basis points.

ISS MI’s data showed that 60 per cent of unitised multi-asset gross sales occurred at 40bps or less.

The firm noted that while selectors were becoming more conscious of cost, this did not mean the end of active management.

Instead, it said this marked an evolution, with the majority of investment fund sales being through advisers and firms that use a mixture of active and passive strategies.

“With price becoming an increasingly important factor in portfolio construction, the question for asset managers is no longer simply whether they can deliver alpha but is instead how they can deliver value within a particular pricing framework,” Reed-Hurwitz said.

“Ultimately, the conversation has shifted from ‘active versus passive’ to ‘what can you deliver for the price you charge’, and how a fund manager’s value proposition fits within a given portfolio.

“We are seeing a clear evolution in the relationship between asset managers, adviser firms and advisers themselves.

“Increasingly, cooperation is at the heart of portfolio construction, with partnerships across the wealth management value chain from fund administration and distribution down to security selection within portfolios.”

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