Almost two-thirds of UK advisors feel the Retail Distribution Review has led to an increase in outsourcing their investment portfolio management, with the majority expecting to increase their use of managed fund solutions and model portfolios as a result, according to a new survey by Fidelity and FundsNetwork.

The survey revealed that post-RDR, significant proportions of financial advisors are looking to increase their use of model portfolios (51 per cent) and managed fund solutions (47 per cent).

Advisors cited regulatory pressure as the main driver for the increase in managed fund solutions, followed by client segmentation and re-focusing of their business from investment selection to financial and tax planning.

Only 14 per cent of advisors are looking to outsource more to discretionary fund managers, while over a third of advisors (37 per cent) indicated that they would use bespoke portfolios less.

The survey suggested that advisors value an on-platform managed solution service, with 59 per cent  of respondents saying it was very important or important.

When choosing a managed solutions service, advisors said that they felt investment expertise and the resources of the managed fund provider were the most important factors, followed by the cost effectiveness of the overall service and a comprehensive range of funds and investment approaches.

The survey interviewed over 200 advisors and was conducted at a recent series of roadshows which saw Fidelity and FundsNetwork partner to help advisors future proof their business models.

“The survey results show that advisors feel that they are under a significant amount of pressure to meet new regulations and as a result are looking to utilise services such as managed solutions and model portfolios. It is therefore crucial that both platforms and providers offer access to these types of solutions as they can help advisors build a robust, cost effective and future proof business model," said Paul Richards, head of sales at FundsNetwork.