Model portfolios (MPS) grabbed the lion’s share of sales in the UK financial adviser distribution channel in the first half of 2025, according to new data.

Figures from ISS MI’s Market Intelligence report reveal that total net model portfolio sales hit £7.8bn in H1.

This accounted for 44% of gross investment fund sales in the first six months of the year.

ISS MI says recent figures also suggest a “realignment” of the adviser sector towards multi-asset solutions.

Unitised multi-asset funds outside of MPS also enjoyed strong demand, attracting £1.2bn in net sales, and notching up the biggest year-on-year increase across all solution categories.

Despite this, net sales of single-strategy funds outside of MPS struggled, recording net outflows of £3.1bn in the first six months of the year.

Benjamin Reed-Hurwitz, head of research development, EMEA & North America at ISS MI, said: “The realignment of the adviser market towards multi-asset solutions is unmistakable.

“Model portfolios in particular have become the preferred vehicle for advisers seeking to combine efficiency, cost-effectiveness and consistent outcomes for clients. MPS providers’ ability to streamline the portfolio construction process at an attractive cost, thus allowing advisers more time to focus on client relationships and practice management, is a major driver behind their adoption.”

Gross sales of active and passive funds through MPS were evenly split in H1, the report found.

Within model portfolios, global and North American equity funds led the way for active strategies, while strategic bond, target absolute return and specialist sectors also recorded strong inflows, according to the firm.

Mr Reed-Hurwitz said: “Strategic bond funds are having a moment in the sun. With so much uncertainty surrounding the future path of interest rates, advisers are becoming increasingly comfortable outsourcing credit decisions to managers who have a flexible mandate to navigate shifting conditions.”

Unitised multi-asset funds continued their turnaround after last year’s concerns over punitive capital gains tax (CGT) changes emerged. According to ISS MI net sales of these funds have been driven largely by advisers dedicated to the solution, with £2.7bn of net sales from IFAs whose sales comprised 50% or more of these products.

Low-cost strategies remain a major theme, with multi-asset funds that have an Ongoing Charge Figure (OCF) below 40 basis points (bps) achieving net sales of £2.5bn in H1. However, demand remained steady for solutions across the pricing spectrum, with funds charging above 40 bps still accounting for 45% of gross sales.

ISS Market Intelligence (MI) is a provider of data, insights and market engagement solutions to the global financial services industry.