Vestmark Inc. and Allspring Global Investments are teaming up to let registered investment advisors build personalized, tax-aware model portfolios that combine Allspring’s actively managed strategies with other holdings.
The deal adds another asset manager to Vestmark’s roster while its sale to Envestnet gets finalized.
Under the partnership, Allspring will supply its public-markets investment strategies along with portfolio construction consultation. Vestmark will run the operations by handling trading, rebalancing, tax-aware transitions and ongoing tax management through its Vestmark Advisory Solutions subsidiary and VAST, its tax-overlay service.
The offering runs on Vestmark’s unified managed account infrastructure, which lets several investment vehicles be held and managed in a single account. Advisors can place Allspring strategies in open-architecture portfolios alongside other managers and still keep control of asset allocation.
Allspring reported $603 billion in assets under advisement as of Sept. 30, including discretionary and non-discretionary assets.
“Advisors increasingly want greater control over portfolio construction without taking on the operational complexity that comes with implementing and managing customized portfolios at scale,” Rob Battista, executive vice president of advisory solutions at Vestmark, said in a statement announcing the partnership with Allspring.
Tony Svach, Allspring’s head of U.S. intermediary distribution, pointed to the strain on growing practices that are facing multiple pressures. “Advisors are under pressure to deliver more sophisticated and personalized outcomes while maintaining efficiency as their businesses grow,” he said.
The partnership targets one of the faster-growing parts of the advice business. Third-party model portfolios held more than $943 billion as of March 31, according to Morningstar’s US Model Portfolio Landscape report, up 46% from a year earlier. Custom models, in which advisors work with a provider to tailor its strategies, rose 40% to $258 billion over the same period.
Vestmark has certainly done its fair share in supporting that shift. The company struck a custom model arrangement with BlackRock in 2024 and launched a custom premier offering with T. Rowe Price in January. In August, Vestmark was selected to help implement Vanguard’s new custom model portfolios for RIAs.
Envestnet, Vestmark’s pending acquirer, is pursuing the same market. Earlier this week it announced custom model solutions with 10 asset managers, including BlackRock, Fidelity Investments and T. Rowe Price, InvestmentNews reported.
Read more: Envestnet eyes RIA benefits of Vestmark deal
The Allspring deal follows an active stretch for the firm. In June, Vestmark said its RIA subsidiary had crossed $50 billion in assets under management, a fivefold increase over 18 months. Earlier in the spring it expanded the role of chief technology officer Freedom Dumlao to include chief AI officer. In May, the company launched Pulse, an AI tool that monitors client portfolios and suggests actions.
Perhaps the biggest development came in September, when Vestmark agreed to be acquired by wealthtech platform Envestnet. Terms weren’t disclosed, and the deal is expected to close in the fourth quarter. Bain Capital-backed Envestnet says its platforms carry about $8 trillion in assets.
Both companies have said Vestmark clients won’t be pushed onto new systems. “Our existing clients don’t have to change, there’ll be no forced migrations,” Steve Gottschalk, Vestmark’s vice president of marketing, told InvestmentNews at last month's Future Proof festival.
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“A better tool does not on its own make a better outcome,” said Humanity Labs CEO Andrei Pop.
“[Vestmark] bring to us the very scaled sponsor trading,” said Envestnet’s Sue Burton.
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