UK managed portfolio market is entering a mature phase, with slowing product launches, falling costs and a shift toward passive and blended strategies across adviser platforms, according to Morningstar.
The report found that after the rapid expansion phase between 2018 and 2022, new portfolio launches have slowed down. Morningstar attributed this shift to a maturing market rather than weakening adviser demand for outsourced portfolio solutions.
Total fees continue to fall, driven mainly by lower costs in underlying holdings and the use of passive building blocks. Morningstar noted that cost competitiveness has become a key differentiator among providers.
The analysis also revealed a decline in portfolios built primarily around active funds. Most recent launches favour passive or blended approaches.
Open-end funds accounted for more than 92% of average portfolio weightings, reflecting platform implementation requirements. ETFs make up around 7.5%, while the use of active ETFs remains limited. Alternatives appear selectively, largely via liquid alternatives funds, although some providers still use listed closed-end vehicles where liquidity and discount volatility can be managed.
Performance has picked up since the tough market conditions of 2022, helped by stronger equity markets, especially for higher-risk portfolios. Even so, many equity-heavy strategies have struggled to match their category benchmarks, with Morningstar citing narrow market leadership, costs and allocation choices as likely reasons.
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As of October 2025, the research database tracked 1,475 live portfolios from 70 provider firms.
Tom Mills, principal for multi-asset strategies at Morningstar, commented: “The UK managed portfolio landscape has reached a point of maturity, with providers focusing on refining cost efficiencies and adapting to evolving adviser preferences. The shift towards passive and blended strategies highlights the growing emphasis on affordability and scalability, while the steady decline in active holdings underscores the competitive pressure to deliver value in a cost-conscious market.”
