The strategic case for centralised investments

The wealth management industry is undergoing a profound transformation, with change arriving through many vectors. Decentralised advice models, in which advisers control both the client relationship and investment decision-making, are beginning to show their limitations.

No longer defined purely by adviser relationships or brokerage-style service models, the future of the wealth management industry now belongs to firms that embrace scale, professionalism, and alignment of strategy and execution.

Historically, the adviser-first approach has fostered deep client trust and personalisation. Yet this same structure often creates fragmentation, limiting the firm’s ability to grow efficiently or consistently deliver outcomes. When individual advisers manage their own investment strategies, the result is a patchwork of portfolios, varied client experiences, and minimal brand equity. Clients build loyalty to their adviser, not the firm. This dynamic, while once a strength, is increasingly a barrier to sustainable growth and enterprise value.

Moreover, decentralised investment decisions hinder margin retention at the firm level. Most of the value created stays with the adviser, not the business. This weakens profitability, complicates compliance, and increases key-person risk. In short, legacy frameworks built on independence are colliding with the new demands of scale and strategic control.

The firms leading the charge into this new era have made a pivotal shift: separating the investment function from the client-facing role and embedding a firm-wide investment capability governed by clear decision-making frameworks. These centralised models, often delivered through separately managed accounts (SMAs), bring institutional discipline to portfolio construction, while still allowing advisers to provide tailored, relationship-driven service.

The advantages of a centralised investment model are far-reaching, delivering measurable value across operational, compliance and investment domains. Operationally, advisers are freed from portfolio management tasks, allowing them to focus on deepening client relationships and delivering strategic advice. From a compliance perspective, a unified governance framework strengthens oversight, reduces risk, and ensures alignment with regulatory expectations. Financially, by internalising investment management, the firm captures additional margin, boosting profitability and enhancing enterprise value. Most importantly, the structured and scaleable nature of centralised solutions enables consistent, high-quality outcomes to be delivered across the entire client base.

Implementing a centralised investment solution is not a binary choice; it can and should be phased. Leading firms are starting with core model portfolios mapped to client risk profiles, such as Conservative, Balanced, Growth, and High Growth. These portfolios are platform-ready and actively managed, allowing macro-economic views and market dynamics to be reflected efficiently.

From there, the offering can expand to include individual asset class models, Australian shares, global shares, real assets, alternatives, fixed income – enabling greater customisation without sacrificing central governance. Direct equity solutions and quant-based strategies offer further sophistication, while semi-liquid alternatives can be introduced for high-net-worth clients, providing access to institutional-grade investments with thoughtful portfolio construction.

Each phase adds value, depth, and scaleability. More importantly, it unifies the firm’s investment philosophy, aligns advisers with a shared process and deepens the brand’s investment credibility. Clients begin to associate outcomes not just with individuals, but with the firm’s over-arching expertise and approach. The urgency to act is growing. Market conditions are dynamic, regulatory scrutiny is intensifying, and clients expect institutional-quality service. The competitive landscape now includes nimble, scaleable platforms offering centralised portfolio management and clear value propositions. Standing still is not a neutral choice – it is a strategic risk.

Wealth management’s future is not about replacing advisers, it is about enabling them to deliver more value through structure, scale and alignment. By internalising investment capability, firms can better serve clients, grow profitably and solidify their place in an evolving industry. Centralised investment solutions are no longer optional, they are the foundation for the next generation of advisory excellence.