Fund managers in the U.K. and across global markets are facing new challenges and opportunities as allocator dynamics shift heading into 2026. Understanding these changes is critical for staying competitive in a market increasingly shaped by cost‑conscious strategies, blended portfolios, and growing consolidation among solution providers.
Benjamin Reed‑Hurwitz recently joined Asset TV in their U.K. studio to walk through how portfolio construction is evolving and what fund managers should be watching in the year ahead. Watch the full conversation below — and here are a few of the key themes he highlights:
- Consolidation among top portfolio solution providers
- The continued dominance of model portfolios (MPS)
- A market‑wide shift toward blended active‑passive strategies
- Growing demand for customization and partnership‑driven solutions
The Growing Influence of Top Portfolio Solution Providers
Consolidation remains one of the most important forces shaping the platform market. ISS Market Intelligence data shows that the top 50 portfolio solution providers — spanning unitized multi‑asset and model portfolio services — now account for roughly half of all investment fund gross sales flowing through platforms. Their allocation decisions increasingly influence adviser behaviour, product demand, and overall market direction.
For fund managers, closely tracking how these providers construct portfolios — and how their preferences evolve — is becoming essential for anticipating future flows.
Model Portfolios Lead Adviser Portfolio Construction
Model portfolio services (MPS) continue to play a central role in adviser portfolio construction. Even as gross sales growth moderates, MPS is capturing a strong share of new money, keeping net sales healthy and reinforcing its influence across the adviser community.
Blended active‑passive construction is now standard, with advisers seeking the right balance between passive efficiency and active value‑add. Products that fit naturally into this blended framework are best positioned to gain traction.
Blended Strategies Are Now the Norm
Across MPS, unitized multi‑asset solutions, and adviser‑built portfolios, blended construction has become the default approach. Advisers are combining low‑cost passive building blocks with higher‑alpha active strategies to balance cost and performance.
This shift is also driving innovation across the industry — including systematic indexing, factor‑based approaches, and systematic active strategies — as asset managers compete to deliver differentiated outcomes within cost‑conscious portfolios.
Customization and Partnerships Are Reshaping the Landscape
Demand for customization continues to grow. Large distribution groups are increasingly blending in‑house capabilities with outsourced expertise, creating hybrid models that sit between DIY and fully delegated solutions. This “co‑opetition” is opening new partnership opportunities and reshaping how solutions are built and delivered.
For fund managers, the ability to support tailored solutions — whether for advisers, distributors, or solution providers — is becoming a meaningful differentiator.
What’s Next
As allocator dynamics evolve in 2026, fund managers should keep the following priorities in mind and consider working with a data partner that can help them track these shifts and respond effectively:
- Monitor the strategies of the top 50 solution providers, whose decisions increasingly influence adviser behaviour and platform flows.
- Position products to align with blended active‑passive construction, now the dominant approach across portfolio solutions.
- Segment their approach to reflect adviser‑specific needs, recognising that preferences vary widely at both the firm and adviser level.
- Explore opportunities for customization and partnership as hybrid and co‑developed solutions become more common across the market.
