The FCA’s recent focus on model portfolio services (MPS), including in the new Regulatory Priority reports, December’s DP25/3 discussion paper, and the upcoming Consumer Duty Multi-Firm Review, signals a clear direction of travel. MPS providers are likely to face a more stringent regulatory environment and although the FCA has repeatedly stated that it does not want to hinder innovation, the operational implications for MPS firms are significant. 

One area under discussion is the potential alignment of disclosure expectations between authorised funds and MPS. If implemented, this would place new demands not only on compliance teams but also on investment operations, as a new factsheet format may have to be adopted.  

The FCA has also raised questions about “fair treatment in carrying out client orders,” which could lead to greater scrutiny of how consistently, quickly, and accurately rebalances are executed across platforms. More specifically, the MPS industry’s operational reality could collide with heightened regulatory expectations. Many portfolio operations teams still rely on manual data entry or platform-specific CSV uploads and rebalancing a single model across multiple platforms can take hours or even days, creating inevitable differences in execution timing. These delays risk creating “winners and losers” among investors in the same portfolio, making it harder for firms to evidence fair value and reasonable outcomes under Consumer Duty. 

As the total assets within MPS grows and the volume of more bespoke and outsourced models increases, these operational bottlenecks will only intensify. Assets within discretionary MPS increased by a third to £190bn in the year to the end of September 2025, according to NextWealth; and MPS launches continue apace, including, in the space of one week in February, new ranges from Fidelity International, Vanguard (with Wellington), and Julius Baer International. According to The Lang Cat’s State of the Advice Nation 2025 report, the percentage of IFAs outsourcing the discretionary management of their own models to DFMs increased by 7% in one year (from Oct/Nov 2023 to Oct/Nov 2024).  

In this environment, the scaling up of manual processes introduces the potential for human error, increases operational risk, and makes it more difficult for firms to demonstrate robust systems and controls. A skipped model or mistyped weighting can lead to financial and reputational consequences. 

Technology is the only scalable answer. Intelligent automation can deliver straight through processing of rebalance instructions across platforms, dramatically reducing execution windows and enabling same-day updates, and all without the human error risk of manual processing. Centralised exception management enables teams to identify unavailable instruments and substitute them more efficiently. Automated maker-checker controls and thorough audit trails strengthen governance and support Consumer Duty compliance. 

"A skipped model or mistyped weighting can lead to financial and reputational consequences; intelligent automation is the only scalable answer."

"A skipped model or mistyped weighting can lead to financial and reputational consequences; intelligent automation is the only scalable answer."

"A skipped model or mistyped weighting can lead to financial and reputational consequences; intelligent automation is the only scalable answer."

The FCA's efforts are not intended to stifle growth but innovation will not be optional for MPS providers operating at scale. As per its March 2026 Consumer investments report, the FCA expects firms to “assess new technologies” to ensure good consumer outcomes and strengthen resilience. As regulatory expectations rise and operational workloads grow, firms that continue to rely on manual processes will struggle to keep pace. 

By embracing automation now, MPS providers can mitigate operational risk, improve execution fairness, and free up investment teams to focus on what truly differentiates them: delivering performance, value, and an excellent client experience. The regulatory direction is clear and the firms that act early will be the ones best positioned for the next phase of MPS growth. 

Laurence McGinty is COO of Tikker 

This article was originally published in: Professional Adviser