Model portfolios are increasingly being woven into asset managers’ core offerings alongside component mutual funds and exchange-traded funds (ETFs). According to our research, nearly three-quarters (74%) of model providers believe that models are an essential part of remaining relevant in the industry. Offering models allows asset managers to engage with advisors on two fronts. They enable firms to work with practices that may not normally be engaged with by sales teams either due to their (lack of) size or because they operate as investment outsourcers. Simultaneously, sales teams appreciate the conversation openings that using models and their accompanying commentary as thought leadership can provide. Supplying resources that materially impact portfolio construction efforts can help managers cut through the barrage of content that advisors receive from service providers.

Unaffiliated broker/dealer (B/D) managed account platforms are the top method of model distribution for asset managers. 70% of model providers view the wirehouse channel as a top-five opportunity to grow assets—a percentage that has grown from 25% in 2018. Why? It’s the channel that boasts nearly $9 trillion in assets and is slowly opening shelf space for nonproprietary models. Furthermore, many B/D home offices are also pushing advisor practices to firms to explore investment outsourcing, so that advisors can dedicate more energy to client relationships. This has created new optimism and openings for model providers to partner with firms at the home-office level.

If you are interested in exploring the multi-faceted dynamics driving asset allocation model growth, explore our latest report today. Use it to uncover opportunities for product development and new distribution possibilities, and gain a comprehensive breakdown of the addressable market. Access these insights today.