How to be sure your model portfolios are ready for the FCA’s Consumer Duty spotlight
With the FCA launching a review into Model Portfolio Services under Consumer Duty, advisers must ensure their investment strategies are not just suitable — but segmented, resilient, and demonstrably delivering value.
Discover why tailored MPS solutions may offer the clearest path to compliance without compromise.
The FCA has announced a forthcoming review into Model Portfolio Services (MPS), placing them under the lens of its Consumer Duty framework. For financial advisers, this means now is the time to ensure your investment solutions meet the regulator’s expectations for client segmentation, suitability and good outcomes.
As MPS adoption grows at pace, FCA wants reassurance that firms are delivering consistent, fair value from the point of recommendation and throughout the client journey. And with increasing interconnectivity between firms, platforms and third parties, advisers must be able to demonstrate not only suitability, but operational resilience, clarity and control.
This is a unique moment in which tailored MPS solutions come into their own.
Segmentation: Obligation or opportunity?
Compliance around client segmentation isn’t new. It’s long been a regulatory expectation under frameworks like RDR and MiFID II. But Consumer Duty has raised the bar. What once was implied is now explicit: firms must evidence that clients are grouped meaningfully (appropriately identifying positive and negative target markets) and placed in solutions that are demonstrably suitable for each segment.
This evolution has turned segmentation into a non-negotiable compliance standard, one that many advisers may still struggle to map cleanly onto the MPS solutions available in the market.
The challenge is that most advisers don’t segment clients the same way DFMs design portfolios. That can lead to a mismatch between client needs and available “off-the-shelf” solutions. In some cases, no pre-packaged MPS truly fits which forces advisers to cobble together compromises or carry the burden of managing in-house portfolios.
But what if you could design portfolios with your client segments in mind from the outset?
Tailored MPS is built around your advice model
With FE Investments’ Tailored MPS, you don’t have to force-fit clients into a standardised box. Instead, you work with FE Investments to build portfolios aligned to your risk profiling, investment philosophy and client objectives and designed to support the segmentation framework you’ve already built into your advice process.
A tailored approach serves clients better while reducing friction across your investment process. It enhances consistency across your firm and makes compliance consistently demonstrable.
Just ask Heritage Investments.
Case in point: Heritage Investments
Faced with the operational burden of managing multiple investment philosophies post-acquisition, Heritage sought a scalable, compliant solution. By adopting Tailored MPS, they:
- Saved £150k in labour costs by eliminating in-house portfolio management
- Reduced portfolio mapping time from 45 minutes to 15 seconds
- Delivered a consistent client experience across a diverse adviser base
- Streamlined compliance by outsourcing DFM responsibilities to FE Investments, who provide robust demonstration of Fair Value and ongoing governance support
- Future-proofed their model with a joint investment committee responsive to regulatory changes
Compliance without compromise
Working with a partner like FE Investments delivers more than just investment expertise. It means peace of mind. Tailored MPS clients benefit from:
- Access to a 25-year track record in data, governance and risk-managed portfolio construction
- A technology-led investment process that provides strong portfolio oversight and governance
- Best-in-class client communication tools including review packs, insight videos and reporting
- A DFM structure that helps derisk your advice model by absorbing key regulatory responsibilities — including oversight, reporting, and capital adequacy — while reducing your overall compliance burden
Let’s talk regulatory readiness
The FCA has made its intentions clear: MPS is under review.
Now’s the time to assess whether your proposition can stand up to scrutiny. With FE Investments’ Tailored MPS, you can ensure your investment strategy is fit for purpose, fully aligned to your advice model, and demonstrably delivering for your clients.
Important information for financial adviser use only.
This marketing material is for financial advisers only. Not for retail investors. It is not a recommendation to buy or sell any particular asset class, security or strategy. Investors may get back less than originally invested. Financial advisers are solely responsible for any further distribution of this document. Past performance is not a guide to future performance.
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