U.S. Asset Allocation Model Portfolios 2025
Assessing the Role of Alternatives in Model Portfolios
Define Future Asset Allocation Model Portfolio Opportunities
- Gain a deeper understanding of the modifier persona for asset allocation model portfolio users
- Explore the operational infrastructure that facilitates model portfolio functionality
- Learn about fees associated with managed accounts, model portfolios, and investment products
- Evaluate how model providers are offering customized solutions for model portfolios
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Summary
Advisors are increasingly looking for assistance when it comes to portfolio construction, either through resources provided by their own firm or through assistance from asset managers and third-party strategists. Demand for these services can be expected to increase as more managed account sponsors propose advisors spend less time on portfolio construction and more time on goals-based planning and client acquisition. Use this report to define and size the current and future opportunity in the asset allocation model portfolio landscape, including a review of the perspectives of the financial advisors, model marketplaces, and model providers.
A Note from the Authors
Custom Asset Allocation Models See Greatest Opportunity for Expansion
Kevin Lyons
Senior Analyst
Bio →
Kevin Lyons
Senior Analyst
Kevin is a Senior Analyst in the Product Development practice at Cerulli, focusing on trends related to asset managers' product strategy, development, and management functions. This broadly includes assessing the opportunity for product line expansion, evaluating emerging product trends, assessing optimal pricing strategy, and understanding distribution and product positioning for investment products across retail and institutional channels. As a Senior Analyst, Kevin oversees Cerulli's Exchange-Traded Fund Markets Report and contributes to various reports, including the U.S. Alternative Investments, U.S. Product Development, and U.S. Asset Allocation Model Portfolios reports. He also plays a role in the quarterly Cerulli Edge: Product Development Edition and contributes to related consulting engagements.
Full biography here.
Brendan Powers, CFA
Director
Bio →
Brendan Powers, CFA
Director
Brendan is co-head of Cerulli’s Product Development and Institutional practices.
The Product Development practice focuses on trends related to asset managers’ product strategy, development, and management functions. This broadly includes assessing the opportunity for product line expansion, evaluating emerging product trends, assessing optimal pricing strategy, and understanding distribution and product positioning for investment products across retail and institutional channels.
The Institutional practice specializes in research and consulting related to institutional asset owners, including defined benefit plans, endowments, foundations, insurance companies, and healthcare organizations as well as third-party allocators including consultants and outsourced chief investment officers (OCIOs).
Full biography here.
As model portfolio assets continue to climb, model providers need to be creative with their solutions to differentiate themselves and tap into new pockets of opportunity. Custom models increasingly continue to lead model portfolio product development initiatives. Our research finds:
- 65% of model provider firms indicate that focusing on custom models is a top-three priority in 2025.
- 71% of asset managers view custom models as a large opportunity, and 18% view them as a medium opportunity.
- One-third of industry model assets are in custom model arrangements, primarily between asset managers and B/D platforms, but increasingly with RIA clients.
Cerulli maintains model providers not already offering custom models, offering them only to a subset of the industry, or offering them only at high minimums should carefully assess the opportunity to expand their offering. Learn more in The Cerulli Report—U.S. Asset Allocation Model Portfolios 2025, which assesses the current and future opportunity in the asset allocation model portfolio landscape for asset managers and third-party strategists.
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