As a proud Scot, I’m often asked if I like whisky. It’s not the most imaginative enquiry in human history – maybe one rung up from questions about wearing a kilt – but, as it happens, I do very occasionally enjoy a wee dram.

Most aficionados begin their adventures in the wonderful world of Scotch with blended malts, which account for the vast majority of the industry’s production volume. They might later move on to single malts, which tend to be more expensive and idiosyncratic.

It’s commonly assumed that the two schools are in direct competition with each other and that the latter is inherently superior. In fact, it’s more realistic to see them as complementary and each as catering to particular preferences.

I mention all this because it’s becoming ever more important to make a comparable argument for co-existence in the sphere of investing. Specifically, it’s time to recognise there’s ample room for both managed portfolio service (MPS) solutions and bespoke services.

In my experience, MPS solutions are eminently capable of meeting the needs of a large number of investors. Yet I’m also acutely aware that the appetite for bespoke offerings is on the rise.

Against this backdrop, investors must fully understand why one or the other option is more likely to prove to their taste. In tandem, like Scotch drinkers confronted by the blend/single conundrum, they must appreciate why they might just enjoy both over the long run.

Recognising MPS’s reasonable limits

MPS solutions have transformed investing for a huge number of individuals – not to mention for their advisers. They involve the outsourced construction and management of diversified, risk-rated portfolios.

It’s hard to dispute the success of this arena, which reportedly accounted for more than £140 billion in assets under management in the UK in September last year [1]. Yet there’s a growing realisation that it has its limits.

Perhaps tellingly, the Financial Conduct Authority (FCA) has announced plans to conduct a review of MPS provision. It says it wants consumers to have confidence that they’re “receiving good outcomes from MPS” in line with Consumer Duty standards [2].

The suitability of MPS solutions for individuals on the cusp of retirement is likely to be high on the regulator’s agenda. For many clients, not least in an era defined by volatility, a portfolio characterised almost exclusively by a given risk rating might lack the flexibility necessary to satisfy their changing requirements.

In my opinion, the main problem here is commoditisation. Too many MPS providers treat their products as precisely that – mere products – when what really makes a difference in most instances is service.

This is where the bespoke option enters the picture. But here’s the rub: how can a third party deliver a truly personalised, uniquely tailored service without undermining the sanctity of adviser-client relationships?

A little something extra

The answer lies in genuine partnership. The objective should be to work closely with advisers and their clients in order to give them all the tools they need to achieve their goals.

This is the fundamental aim of Marlborough’s Personal Portfolio service, which we launched earlier this year. Our conversations with the adviser community have made clear that such an offering increasingly represents the desired direction of travel for many investors, especially those with greater financial complexity and no longer in an early wealth-accumulation phase.

A significant proportion of these individuals have benefited from MPS solutions in the past but now want something extra – access to a broader array of assets, say, or a capacity to seize additional opportunities for outperformance as events, preferences and values evolve. Generational wealth preservation and transfer can frequently be key to their thinking.

At the same time, crucially, we’re also experiencing more demand for our MPS range. This further illustrates that both approaches have their merits and that it’s essential to acknowledge neither is intended to render the other redundant – just as in the synergistic relationship between blended and single malts.

Of course, every malt has the same core ingredient – barley – at its heart. In a similar spirit – if you’ll excuse the pun – we employ the same multi-asset framework to underpin our MPS and bespoke offerings, underlining that both are extensions of our team’s outcome-centred investment philosophy.

Ultimately, the key message for advisers is simply that clients need to know there’s a choice. They need to be aware that MPS solutions and bespoke services each have their own attractions and that, depending on circumstances, either can be a better fit for an investor. Ideally, the result should be a win-win situation – and I reckon we can all raise a glass to that.

Edward Kennedy is Head of Marlborough’s Personal Portfolio service

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[1] See, for example, Good Money Guide: “Tatton IM and Quilter dominate top 10 model portfolios rankings in 2025”, January 7 2025 – https://goodmoneyguide.com/investing/wealth-manager-model-portfolio-rankings/

[2] See, for example, Money Marketing: “FCA to launch MPS Consumer Duty review”, February 26 2025 – https://www.moneymarketing.co.uk/news/fca-announces-plan-to-launch-mps-consumer-duty-review/

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.