Yesterday, AJ Bell Youinvest announced a cut on its multi-asset funds to 0.35%. The steady growth of its passive fund range has allowed it to slash the OCF, passing on savings to investors. The recent FCA asset management market study highlighted that investors often don’t benefit from economies of scale. With fund firms required to provide value for money disclosures in the future, we think AJ Bell’s move is prescient.

One of the trends that we continue to see with direct platforms is their focus on simplified in-house investment solutions. Many try to make investing easier and more accessible by offering multi-asset and ready-made portfolio solutions. Recent examples include Interactive Investor’s model portfolios, Willis Owen’s starter portfolios and, in addition to their multi-asset funds, AJ Bell Youinvest’s ready-made portfolios.

The growth of in-house multi-asset funds is not unique to platforms. As more banks have entered the robo-advice market, they have opted to use their own multi-asset funds as the bedrock of their portfolios, rather than discretionary model portfolios built from third-party ETFs. The most recent developments come from Santander’s new ‘Digital Investment Adviser’ which guides investors into the Santander Multi-Index fund range and HSBC’s ‘My Investment’ utilising the HSBC Global Strategy funds.

Further analysis of the trends and developments in the D2C market will be covered in our UK D2C report Market Size and Structure to be published this month. We’ll also look at D2C Distribution Dynamics in March as part of our UK Fund Distribution series of reports primarily for asset managers. For more information please get in touch.