Finding the middle ground between in-house and outsourced investment solutions

Brought to you in partnership with Minerva Fund Management Solutions

Is my investment proposition still fit for purpose?

The world of financial advice continues to be an ever-developing industry. The pace of change across the financial advice landscape has accelerated sharply, meaning firms must make changes to keep up or risk being left behind. This raises a key question for financial advisory and wealth management firms: is my current investment proposition still fit for purpose?

At the same time, the investment propositions available for advisory firms has widened, with an abundance of model portfolios and discretionary solutions available to choose from. The option of implementing a unitised investment solution (a flexible investment structure where client assets are pooled together and professionally managed within a single regulated fund rather than across hundreds of separate client accounts) is a new concept to some firms. And yet it offers an alternative middle-ground to in-house solutions or outsourced discretionary solutions, with a solid structure and the ability for you to retain control of your proposition at the heart of it.

The importance of control

Having control of your investment proposition is important to many advisory firms, which can lead to a reluctance from some advisers to outsource. Retaining control of the investment proposition feels integral to providing a high level of service to their clients. If the investment proposition is run in-house on an advised basis, the amount of resources it requires, continuous oversight, regular rebalancing and ongoing administrative tasks will only grow as portfolios and client needs become more complex; increasing operational risks. Running in-house advisory models can create administrative burdens that over time become harder to ignore such as:

• Capacity restraints – time spent managing portfolios is time not spent on financial planning or client relationships.
• Increasing client complexity – results in increasing pressure to deliver the most suitable advice – particularly around retirement income, tax planning and intergenerational wealth.
• Consumer Duty – expectations are forcing firms to evidence outcomes and value for money.

Regaining the control

In seeking the middle ground between in-house advisory and outsourced discretionary solutions, more and more financial advisory firms are looking for the opportunity to form relationships with like-minded partners such as an Authorised Corporate Director (ACD), to mutual benefit, leveraging what both parties can bring to the table to help and support each other. An ACD is a regulated entity who manage and oversee the overall running of unitised investment solutions. Forming a strategic partnership with an ACD can allow advisors to relieve some operational burden and increase scalability while still owning the strategic direction and control of their proposition and brand.

The middle ground: launch your own multi-asset funds

An advice firm managing hundreds of client portfolios with more than £100m in AUM, for example, is likely to eventually find this to become resource intensive and unmanageable. Implementing a unitised investment solution could not only provide more consistent client outcomes but lighten the operational load. The process of implementation is also a more simple one, with the key steps for the financial advisory firm being:

• Identifying the client segments for which the fund would be suitable
• Deciding on which funds are required (i.e multi asset funds to suit various risk profiles)
• Agreeing, with the ACD, an investment manager to manage investments within the funds

Tailored unitised investment solutions offer a middle ground not always considered as an obvious choice by firms. In essence, a unitised investment solution gives firms the opportunity to retain control over their investment proposition, while reducing operational and financial burdens. A designated investment manager manages the portfolios, an ACD manages the ongoing operations of the funds and the financial advisory firm has their own branded solution – with all parties collaborating to manage the proposition.

What are the improvements for the advice firm?

The practical impact of a solution tailored to align with the needs of both the business and its’  clients is significant. The benefits include:

• A significant reduction in the administrative load of managing portfolios – running in house models can be extremely time consuming and administratively burdensome, where a unitised investment solution helps to free up time to focus on client relationships, increase scalability, and high‑value financial planning work.
• Fees aligned with the value chain – a structured partnership enables a clear and transparent fee model where fees reflect each party’s contribution.
• Compliance support giving a layer of regulatory oversight, documented governance processes and operational resilience. This can reduce risk for the firm and helps ensure the investment proposition remains consistent, and aligned with ongoing Consumer Duty requirements.
• Achieve truly consistent investment outcomes across the client base, regardless of client portfolio size, without needing to sacrifice the need for economy over scale.

Compromising on control

Rathbones found that 73% of advisers believe they could grow their business by up to 10% in a year if they spent less time on portfolio management. (Rathbones article, September 2025). This is one of the reasons outsourced investment solutions have become an increasingly popular choice for firms in recent years. This is the direction in which the financial advisory sector has been moving, as more and more advisors are utilising an outsourced discretionary option for a variety of reasons:

• The opportunity to regain some time and concentrate on other areas of the business.
• Outsourced propositions are becoming more cost-effective than advisor-managed portfolios.
• Outsourced discretionary removes some operational heavy lifting from advisors including rebalancing, fund selection and documentation preparation.

On the other side of the coin, by utilising an outsourced discretionary solution, rather than feeling empowered, some advisers may feel a loss of control over their brand, investment strategy and proposition.

Sometimes it’s the obvious answers that we miss. Could it be time to think about taking your own proposition down a new path?

As firms reassess how they deliver investment outcomes at scale, structure is becoming just as important as fund selection. For those seeking efficiency without relinquishing strategic direction, a unitised solution may represent a route worth exploring.

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