Discretionary investment management has become a go-to strategy for high-net-worth individuals and busy professionals in the UK. But what exactly is it—and is it worth the management fees in 2025?
This guide breaks down how discretionary investment management works, who it’s for, and why more UK investors are handing over the reins to financial professionals.
What Is Discretionary Investment Management?
Discretionary investment management is a service where a portfolio manager or wealth management firm makes investment decisions on your behalf. This includes selecting, buying, and selling securities such as stocks, bonds, and funds—without needing your approval for every trade.
You give the manager a mandate that includes your investment goals, risk tolerance, and restrictions. After that, they take care of the day-to-day management, freeing you from constant monitoring.
Why Use Discretionary Management in 2025?
The UK’s investment landscape is more volatile and tech-driven than ever. With interest rate uncertainty, inflation concerns, and global market shifts, professional hands-on management can protect and grow your assets.
Key benefits include:
- Time Efficiency: No need to track markets daily.
- Expertise: Access to seasoned fund managers and analysts.
- Tailored Strategy: Aligned with your financial goals.
- Risk Management: Portfolio rebalancing in real-time.
- Tax Optimization: Managers can adjust portfolios for tax efficiency.
Who Is It Best Suited For?
Discretionary investment management is ideal for:
- High-net-worth individuals (typically £250,000+ in investable assets)
- Busy professionals or retirees who lack time for daily market monitoring
- Families managing long-term wealth and legacy planning
- Entrepreneurs who want liquidity flexibility while building portfolios
If you’re considering other long-term financial tools, like a Family Investment Company (FIC), discretionary management can work in tandem to create a structured wealth ecosystem.
Types of Discretionary Portfolios in the UK
- Model Portfolios
Pre-set investment strategies aligned with risk levels. - Bespoke Portfolios
Fully tailored portfolios for high-net-worth individuals with unique needs. - Ethical or ESG Portfolios
For investors focused on sustainability and ethical governance. - Multi-Asset Portfolios
Diversified investments across equities, bonds, property, and alternative assets.
How Much Does It Cost?
Discretionary investment managers typically charge:
- Annual Management Fees: Ranges from 0.5% to 1.5% of AUM (assets under management)
- Performance Fees: Some firms may charge extra based on portfolio gains
- Trading or Custody Fees: May apply depending on the provider
It’s crucial to compare providers and assess if their fee structure aligns with your return expectations.
How to Choose the Right Investment Manager in the UK
When selecting a discretionary manager:
Check FCA regulation and firm credentials
Review past performance across different market cycles
Ask for a sample mandate or model
Understand reporting frequency and transparency
Compare platforms (e.g., Brewin Dolphin, Evelyn Partners, Rathbones, etc.)
Frequently Asked Questions (FAQs)
What’s the difference between discretionary and advisory investment management?
Discretionary gives the manager full control to act on your behalf. Advisory means you receive recommendations, but you approve every trade.
Can discretionary portfolios be tax-efficient?
Yes. Managers can utilize tax wrappers like ISAs, SIPPs, and tax-loss harvesting strategies.
Are there minimum investment requirements?
Most firms require a minimum of £100,000 to £250,000 for bespoke discretionary portfolios. Model portfolios may start lower.
Can I switch strategies later?
Absolutely. You can revise your mandate or switch to advisory service if you want more control.
Final Thoughts: Is Discretionary Investment Management Right for You in 2025?
If you’re serious about long-term wealth growth, don’t want to babysit your portfolio, and need a tax-optimized, stress-free approach, discretionary investment management is worth considering.
With the right provider, it’s more than just hands-off investing—it’s a strategic partnership that aligns with your financial future.