The industry has reached “peak MPS”, according to James Sullivan who heads up Tyndall Partnerships.
Sullivan said advisers are craving more personality than the average managed portfolio service can offer and he predicted that a number of MPS providers would leave the market in the coming years.
He told FT Adviser: “We have hit peak MPS, I think the market is saturated now. It lacks a degree of personality.”
“I think it is inevitable for some of the providers to drop away,” he said.
“There has been a race to the bottom on the fees side and it is only the big providers that can afford to do that.
“When MPS started the fees were around 30 basis points, now it has come down to 15.
“It will squeeze out some of the smaller players.”
‘Advisers want to be involved in the investment side’
Tyndall Partnerships aims to provide tailored investment solutions for advisers.
It was started in 2020 and is part of Tyndall Investment Management, which Sullivan joined five years ago as a fund manager.
“I saw that nobody was wanting to buy funds of funds and I thought there is a better way to deliver to the IFA community and that is not through a sterile MPS,” said Sullivan.
At the moment, Tyndall Partnerships works with around 20 advice firms which meet with the firm every quarter to take part in an investment committee on the investment solutions.
Sullivan said: “They choose to do this rather than buy an MPS because they are still interested in the investment aspect of their role.
“We ensure that they are well versed in what we are doing and why we are doing it.”
Sullivan claims advisers are keen to share their opinions on their outsourced investment propositions.
He added advisers are given the opportunity to white label fact sheets on the investment propositions and Tyndall hosts webinars for the underlying clients of advice firms.
"The way to be successful is really simple, we just have to give the client what they want," added Sullivan.
tara.o'connor@ft.com
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