Investing in the age of AI

As we move through 2025, the investment landscape continues to evolve, shaped by regulatory changes, technological advancements and shifting client expectations. For financial advisers, the challenge is no longer just about constructing portfolios. It’s about building resilient, future-proof businesses. In this context, multi-asset investing has transformed from a product-led approach into a strategic partnership model.

Understanding the challenges advisers face

In our conversations with clients and partners, we consistently hear about three core challenges:

1. Regulation – From the Retail Distribution Review (RDR) to the Consumer Duty, the regulatory landscape has become more demanding. Advisers must now evidence suitability, value for money and client-centricity with greater rigour.

2. Efficiency – With increasing pressure on margins, firms are seeking ways to streamline operations, reduce administrative burdens and scale effectively.

3. Client outcomes – Delivering consistent, compelling outcomes is essential.

At the heart of all three lies a common thread: risk management. Whether it’s investment risk, operational risk, or commercial risk, advisers are looking for ways to reduce friction and increase resilience.

The rise of multi-asset outsourcing: a structural shift

Model portfolio services (MPS) and multi-asset funds have emerged as powerful solutions to these challenges. Since RDR in 2013, the options within the MPS market have grown at least sevenfold and there has been a similar shift towards multi-asset funds, driven by a structural shift towards outsourcing in a controlled, strategic way¹ . This growth has continued through periods of extreme volatility, including the COVID-19 pandemic and the market shocks of 2022, underscoring the resilience and relevance of this approach.

When L&G launched its MPS proposition in 2021, we entered a mature and competitive market. But we did so in response to client demand, particularly from those already familiar with our multi-index solutions, which have delivered cost-effective, risk-managed solutions since 2013. These clients weren’t just looking for a product, they were looking for a partner to address their key challenges moving forwards.

Cost is important, but value for money is essential

In today’s multi-asset landscape, there is a wide range of realised outcomes and fee structures. Our view is clear: high fees do not guarantee high returns. In fact, the drag from excessive costs can erode long-term performance. That’s why our multi-asset solutions are designed to be cost-effective without compromising on investment integrity.

We believe in aiming to deliver consistent outcomes, backed by an institutional approach to asset management that advisers can rely on. Whether through flagship portfolios or bespoke solutions, our goal is to support advisers in meeting their clients’ needs, while helping them grow and future-proof their businesses.

Beyond returns – a partnership approach

Beyond performance and pricing, what truly defines a successful multi-asset partnership in 2025 is the ability to enhance an adviser’s overall proposition and improve existing processes. Advisers today are not just looking for investment returns, they’re seeking ways to reduce risk, streamline processes and scale their businesses sustainably. This is where outsourcing through a multi-asset partner can be transformative.

One of the most immediate benefits is the removal of administrative burdens like advisory switch letters, client approvals for rebalancing and platform inconsistencies. These tasks can often consume valuable time and introduce operational risk. By outsourcing rebalancing and portfolio management, advisers can focus on what matters most: deepening client relationships and growing their businesses.

But a true partnership goes beyond discretionary permissions. A key area of support has been within the regulatory component, from support to define the target market to segmenting clients and evidencing this all within the Consumer Duty framework. A collaborative multi-asset partner brings not just investment expertise, but also regulatory insight and operational support. In a world where change is constant, having a partner with the scale and foresight to anticipate and adapt to regulatory shifts can be invaluable.

Brand and reputation also play a critical role in this equation. In a profession built on trust, the strength of your brand can be the deciding factor for clients navigating complex financial decisions.

Many clients may only choose an adviser once in their lifetime, so making that decision carries immense weight. A strong, recognisable brand can bridge the information gap and provide reassurance.

At L&G, we understand the value of brand equity. Like the advisers that we work with, we’re proud of our reputation. Whether you’re a solo practitioner who’s grown into a multi-adviser firm or a well-established regional player, we aim to support your brand, not overshadow it. From co-branded literature to joint client-facing content like videos and commentary, we want to help you tell your story in a way that resonates with your clients.

And finally, there’s the investment support itself. Our size and scale mean we can offer access to a deep bench of economists, strategists and asset class specialists. During periods of market volatility, this network becomes a vital resource, helping our clients translate complex market movements into clear, concise client conversations.

In short, while outsourcing an investment solution can’t solve every business challenge, we believe a thoughtful, well-aligned partnership can remove friction, reduce risk and unlock new opportunities for growth. In a world where trust, efficiency and adaptability are more important than ever, that kind of partnership is not just valuable, it’s essential.

Key Risks

The value of an investment and any income taken from it is not guaranteed and can go down as well as up, and the investor may get back less than the original amount invested. Assumptions, opinions, and estimates are provided for illustrative purposes only. There is no guarantee that any forecasts made will come to pass.

Find out more about the L&G Model Portfolio Service Model portfolio service | L&G

Important information:

The information in this document is for professional investors and their advisers only.

The details contained here are for information purposes only and do not constitute investment advice or a recommendation or offer to buy or sell any security. The information above is provided on a general basis and does not take into account any individual investor’s circumstances. Any views expressed are those of L&G as at the date of publication. Not for distribution to any person resident in any jurisdiction where such distribution would be contrary to local law or regulation.

This financial promotion is issued by Legal & General Investment Management Ltd. Registered in England and Wales No. 02091894. Registered office: One Coleman Street, London EC2R 5AA. Authorised and regulated by the Financial Conduct Authority

¹Source: Morningstar Direct, as at 31 March 2025.