When the Transact – BlackRock MPS launched over a year ago, it marked a couple of ‘firsts’.

It was the first time Transact had entered into the world of investment management, with a range of seven model portfolios run by BlackRock exclusively for Transact users.

It was also the first time BlackRock would be managing an MPS range on a UK adviser platform, having previously partnered with Embark (as was) on its Retirement Pathways funds for non-advised customers in drawdown.

One year on, Transact says the BlackRock MPS represents the fastest growing DFM launch on the platform.

So how does this fit with other platform/MPS tie-ups? And can integration ever be a good thing?

The lang cat view

In a way the Transact – BlackRock partnership is a different flavour of what exists already, and models that have gone before.

There’ll always be space for open architecture, but if we count it up across the market we can see several examples of this kind of structure elsewhere. Quilter has its WealthSelect proposition, and abrdn has the MyFolio ranges.

Parmenion has gone from a starting point of focusing on its in-house DFM to opening up access to third-party DFMs, and Nucleus explored its own in-house investment arm IMX ahead of the acquisition by James Hay.

The Transact – BlackRock MPS is effectively the same thing, albeit done through a third party rather than pure vertical integration.

No doubt BlackRock and others will set up similar partnerships, as we saw in September in the D2C world with the launch of Monzo’s investments service.

Integration (usually in the VI sense) often comes in for some stick – some of that may be justified, but always? Maybe, maybe not.

This stuff might feel new if you weren't there for Life Cos 1.0, but for everyone that was there for the insured world of old, it's just that again.

Those behind integrated deals might reasonably put forward the argument of ‘why not?’  i.e. as long as you create something you’re proud of, why wouldn’t you do it?

Too much integration might be controversial for some, but as a counterargument we only need look at things like PruFund or Royal London’s Governed Portfolios, where the products are indivisible from the investment solution. Adviser take-up suggests integration can be good for those that want it.

Selection criteria: Platforms vs MPS providers

Against this backdrop, it’s interesting to see what’s important to advisers when choosing their platforms compared to choosing their MPS proposition.

Data from our latest State of the Adviser Nation report and based on usage of our Analyser software suggests that when it comes to platform selection criteria, factors like service, support, brand and reputation come out on top. While price is a consideration, it’s not the main priority.

Yet when we look at the MPS market, what’s important to advice professionals is price and performance. Service is actually towards the bottom of the list.

That is a sign of a very commoditised market.

So when filtering down something like 120 providers, those in the bottom three quartiles will get knocked out pretty quickly where they don’t stack up on price and performance. That will be happening regardless of how integrated or not the investments and platforms are.

You can find out more about the Transact-BlackRock MPS, alongside other MPS propositions, inside Analyser.