Next week, we’ll be publishing CIPs in 2026: Tuning the Engine for Growth, the third edition of our Centralised Investment Proposition (CIP) research with the lang cat. This research, conducted in 2022, 2024 and 2026, looks at how advice firms are adapting their CIP to changing market and regulatory conditions.
The findings of the three reports highlight a clear move towards outsourcing. In 2022, 51% of firms ran portfolios in-house for the majority of clients, with 38% using outsourced MPS. By 2026, that has reversed, with 63% of firms now mostly outsourcing, compared with 23% running portfolios predominantly in-house.
Changing regulations, from MiFID II to Consumer Duty, have made running a CIP in-house at scale progressively harder, driving the shift to outsourcing. While outsourcing can reduce adviser administration and risk, there are still operational considerations.
In this series of blogs, we look at how to get the most out of outsourcing while staying on the right side of the regulator, sharing three tips:
- Make sure you have formal governance in place
- Hold providers to account
- Think about the direction of travel
Across the series, we explain that outsourcing only delivers on its promise to improve your processes, your compliance position and your clients’ outcomes when it is managed properly. That means solid governance behind the initial decision, holding providers to account once the arrangement is in place, and a clear view of where the relationship needs to go as your firm grows.
Tips for CIP outsourcing 1: Making sure you have formal governance in place
Our first CIP report, The Centralised Investment Proposition: An Overheating Engine? in 2022 predicted that Consumer Duty, then newly introduced, would make it harder for firms to manage investments in-house, and that this would push more firms towards outsourcing. Our subsequent reports, An Overheating CIP 2024: Ways to cool the engine and CIPs in 2026: Tuning the Engine for Growth, have confirmed this. Monitoring and documenting investments have become harder when managing a CIP in-house, and 63% of firms now outsource at least some of their clients’ investments as a result.
In February 2025, the FCA sent providers a supervisory letter setting out a multi-firm review of MPS, looking at how firms are applying the Duty to give confidence that investors are receiving good outcomes. The regulator’s initial focus for this review has been on providers. In May 2026, it sent an information request to 40 wealth and asset managers asking how they construct, price and govern their Model Portfolio Services ranges, with findings due in early 2027. It isn’t certain the FCA’s scrutiny will extend to advice firms directly, but two areas are worth reviewing now regardless, documentation and monitoring, so formal governance holds up if regulatory attention does turn to the advice side.
The FCA has recently published a review into how firms approach products and services in relation to Consumer Duty more generally. Examples of good and bad practice it identified can be found here: Products and services: good practice and areas for improvement | FCA. It looks likely that the regulator will be expecting firms to place more focus on how they review management information (MI) and data to inform decisions related to their MPS providers.
Documentation
Written documentation of process is not optional when outsourcing. Under Consumer Duty, firms must be able to evidence that their decisions were made with delivering fair value to the client in mind. A formal documentation process protects the firm as much as the client.
The most important documents are the CIP policy and design, setting out the thinking behind the operation and how the strategy is implemented, and 87% of firms already have this in place. However, beyond that, documentation is uneven. Our research found that 66% of firms have a documented due diligence framework, 53% use an external research or ratings provider and only 35% have compliance-led oversight of their proposition.
These are all part of the same evidence base as the CIP policy itself, so it is worth checking they are properly documented. If it isn’t written down as part of a formal process, it doesn’t exist in the eyes of the regulator. Explaining a decision, such as choosing an MPS provider, without evidence of market-wide research will not satisfy the regulator.
Monitoring
Our 2026 research also found that 74% of firms run a formal monitoring process, but only 60% have an investment committee. More than half of advice firms are single-adviser businesses, where the investment committee, the adviser and the office manager are often the same person. A formal committee sitting round a table is unrealistic for many firms, but the structure is less important than the practice.
A formal committee does not have to mean a board with segmented roles covering every aspect of investment decision making within the CIP. It is about evidencing a considered approach to investment decisions, one that is monitored, adjusted and documented.
Outsourcing can help with this, but it does not happen automatically. For advisers who want a more engaged relationship with their DFM, a specialist solution such as custom MPS is worth considering.
Provider accountability
Documentation and monitoring should sit at the centre of any CIP arrangement. Outsourcing takes some of the investment weight off the adviser, but it doesn’t remove the need for the governance behind it. Providers carry some of that responsibility too, and in our next blog we look at what to expect from a provider once the arrangement is running, and what should trigger a closer look at the relationship.
Find out more about our investment services
If you’d like to speak to our team about how we can help your firm manage it’s CIP, call us during office hours Monday to Friday on 020 4599 6475, or email [email protected].
This article, like our investment services, is intended for regulated financial advisers and investment professionals only. Copia does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such. Remember, the value of investments will fluctuate, and capital is at risk.
