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There are a range of powerful commercial considerations that have made outsourcing portfolio management the best way for advisers to deal with the today’s dynamic regulatory environment as Andy Miller, Lead Investment Director, explains.
Creating and managing an efficient in-house investment process has always been challenging, thanks to the uncertain economic backdrop, and the ever-evolving needs of your clients. However, the introduction of the Consumer Duty, and the requirement to demonstrate that services meet the needs of your clients, deliver the right outcome, and provide value, has made running advisory portfolios even tougher. As a result, the level of expertise, time, and resources required to manage portfolios now far exceeds what was required previously.
The commercial conundrum
To illustrate the current cost pressures on adviser firms, let’s imagine you have a client with £150,000 in an advisory portfolio who pays an ongoing advice fee of 0.5%. That amounts to an annual fee income of £750. With a typical hourly rate for an adviser of, let’s say, £150, this means that if you spend any more than five hours on this client, they will be loss-making for your firm.
Faced with such realities, the next question is whether you can run an efficient investment process, provide robust financial planning, and demonstrate it is delivering appropriate client outcomes, all within the five hours allotted?
The silver lining
Some advisers will, of course, have the resources and in-house expertise for this, but for many others, this simply isn’t possible. The silver lining is that outsourcing the day-to-day investment management of your client portfolios can alleviate the mounting regulatory strain on your business and free-up your time and resources. This helps ensure your clients receive ongoing advice that is appropriate to their needs, cost-effective, and sustainable. This improves profitability and can help drive positive outcomes for your clients.
You may be delegating your investment management process – but you are not delegating your responsibility to your clients.
Andy Miller
Lead Investment Director, Quilter
Client and adviser benefits
Delegating your investment process to the right manager reduces the need for expensive in-house investment expertise as well as the analysis systems and regulatory costs that now accompany the management of client portfolios.
Outsourcing can deliver increased margins as well as a range of other operational, regulatory, and investment efficiencies. It can also deliver greater productivity by reducing the administration and research required to build, monitor, and report on your client portfolios.
Commercial benefits to outsourcing
✔ Lower costs and increased margins
✔ More time and greater productivity
✔ Less risk and more value
A broader and more valued advice service
The prospect of outsourcing your investment process may be a concern for you – especially if portfolio management was previously highlighted as a value-add service to your clients. You may be delegating your investment management process – but you are not delegating your responsibility to your clients. In fact, outsourcing creates greater opportunities to enhance the service you offer.
These can include holistic tax planning, behavioural coaching, and, of course, the work involved in reviewing existing goals, setting new ones, or using cashflow modelling tools to illustrate the journey.
Aligning interests
When done properly, outsourcing your investment process can be seen as a natural extension of your firm’s advice service. It allows you to focus on aligning solutions with the needs of your clients and helping them achieve their financial goals.
Outsourcing also enables your clients to benefit from an enhanced investment process. Whether that is better research capabilities, a wider range of investment options, or the attraction of tapping into a more robust due diligence process. Additionally, some of the requirements under the Consumer Duty, such as assessment of value, will be done for you.
All these elements ultimately help to deliver better outcomes for your clients, and rigorously demonstrate your approach to doing so. Also, where outsourcing proves its worth in reducing regulatory risks, reducing costs, and increasing profitability.
For you and your clients, there has never been a more appropriate time to partner with the right investment manager to support your firm’s investment process.
Andrew Miller
Lead Investment DirectorAndy is the lead investment director heading up the investment director team at Quilter. Andy joined Quilter in 2015 from Architas having previously held senior distribution roles at life offices and fund managers, including 10 years at Prudential.
Andy is a chartered financial planner, a fellow of the Personal Finance Society, and holds the CFA ESG certificate.
This communication is issued by Quilter, a trading name of Quilter Investment Platform Limited.
Approver: Quilter May 2026
QI 26600/205/16300
