LONDON (7 April 2026) – New data from ISS Market Intelligence (ISS MI) reveals that multi-asset net sales remained remarkably resilient in the second half of 2025 even as the broader retail investment market struggled.
ISS MI’s latest Portfolio Construction report shows that total net model portfolio (MPS) sales slowed from £8.1bn in the first half of 2025 to £7.6bn in the second half.
Unitised multi-asset funds experienced positive net sales overall in 2025, although sales slowed from £1.1bn in H1 to £1.0bn in H2.
Single strategy funds selected by advisers, on the other hand, saw net investment fund outflows accelerate from £3.4bn in H1 to £5.4bn in H2.
Overall, MPS remained the dominant solution type in H2, accounting for 46 percent of gross IFA platform sales, compared with 20 percent for unitised multi-asset funds and 34 percent for adviser managed solutions.
But while MPS continue to dominate, these flows were driven by around 2,100 ‘power users’, defined as adviser firms where MPS accounted for more than 50 percent of their investment fund gross sales.
Benjamin Reed-Hurwitz, Head of Research Development, EMEA & North America at ISS MI, said: “The dominance of model portfolios continued in the second half of 2025. 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. Amongst MPS power users, net sales for MPS were close to £6.5 billion, while net flows were almost £5 billion 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. 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.”
Alongside this growing segmentation, cost is emerging as the defining factor in portfolio construction.
ISS MI’s data shows that the average sales-weighted ongoing charge figure (OCF) for funds sold within MPS was 36 basis points in the 12 months to the end of 2025. More than a third (37 percent) of MPS solution sales were sold as part of portfolios that had an average underlying fund OCF of 30 basis points or less last year. Some 55 percent of sales, meanwhile, were tied to 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 includes portfolio management fees and underlying fund costs, of 47 basis points. ISS MI’s data shows that 60 percent of unitised multi-asset gross sales occurred at 40bps or less.
However, while selectors are becoming more cost-conscious, this has not meant the end of active management, but an evolution. In fact, a majority of investment fund sales are through advisers and firms that utilise a blend of active and passive strategies.
Reed-Hurwitz added: “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.
“This is forcing asset managers to rethink not just pricing, but how they justify their role within increasingly cost-constrained portfolios. 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.”
Visit https://www.issmarketintelligence.com/solutions/marketsage/uk-retail-advice-report/ to learn more about portfolio solution selection and construction trends in the U.K.
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