Q&A with Daniel Nilsson
In this Q&A, senior portfolio manager Daniel Nilsson – who started his career as an IFA – discusses some of the key changes in the investment world over the last decade. He also outlines what he would like to change about the industry if he could…
What’s the biggest change you’ve seen in the industry since you joined?
I’ve been in the industry since 2016 and the biggest change I’ve observed has been the trend to move away from active managers as passive investing grows. This has been especially the case within global developed equities. Over this time period, active managers have significantly underperformed passive indices and the Morningstar and SPIVA data indicates that over 90% of active managers underperform the benchmark in large-company developed equity markets.
The rise of sophisticated institutional investors has made it harder for anyone to gain an edge, while the increasing competition among providers of passively managed funds has driven costs to unprecedented lows. In 2026, investors can now access broad market benchmarks in the low single digits from a total cost perspective.
What is the investment topic most often brought up by your clients?
One topic right now is definitely how are we positioning portfolios amid heightened geopolitical tensions and conflicts in the Middle East. Against this backdrop, our portfolio construction approach remains focused on resilience. Portfolios are diversified across asset classes, regions and risk drivers, with a measured underweight to equities and a preference for higher-quality credit. In our view, maintaining flexibility, rather than reacting to short-term market movements, remains key to navigating a more uncertain investment landscape.
The recent environment has highlighted that bonds may not always provide the diversification investors expect, particularly when inflation risks are rising and central banks are cautious about cutting interest rates too quickly. As a result, we continue to favour shorter duration and floating rate exposures, which offer greater resilience in a more uncertain rate environment.
What piece of regulation has had the biggest impact on your day-to-day role?
Consumer Duty and the upcoming FCA review into the model portfolio service (MPS) space. Consumer Duty has raised expectations for evidencing value and the FCA’s upcoming review into the MPS sector will increase scrutiny on governance. Advisers are under even more pressure to demonstrate value and meet compliance obligations. MPS firms which offer a clear value proposition and a robust investment approach developed in the institutional world can become indispensable partners to those seeking simplicity and support.
We think that the FCA’s upcoming MPS review will positively shape the future of the industry, and we think formalised guidance in terms of performance reporting and benchmarking will be a beneficial development for the industry.
What single change would you make to the wealth management industry?
I would continue to attempt to democratise access to wealth management or asset management and I think there are some good things in progress in that regard. Bridging that persistent UK financial advice gap, between those who need financial advice and those who can access it, is something I am very passionate about, given I started my career as an independent financial adviser. Digital tools to some extent will be able to democratise basic financial planning and increase access, but I’m very much of the view that human advisers remain pivotal for complex areas, such as inheritance tax planning and navigating significant life events.
Any advice for somebody just starting out in the industry?
The first comment would be to just enjoy it and remember who the end customer is and why we do what we do. The willingness to get your hands dirty and understand the real issues that your clients are facing and not just from an investment perspective, is something I’ve always abided by.
Aside from that, work hard, be curious and make sure you ask a lot of questions – that is often the best way to learn.
Daniel Nilsson is a senior portfolio manager for Isio Investment Solutions.
isio.
kris.das@isio.com