While 62% of advisors and 55% of all practices rely on their own investment research and portfolio construction, Boston-based research firm Cerulli Associates believes that only 7% of those advisory practices are at an optimal scale to perform those functions.
That rarified group says, Cerulli says, typically have an average account size of at least $2 million and assets under management greater than $250 million, although practices that can genuinely customize portfolios skew closer to the $500 million range, the firm said in a release based on a recent survey of advisers.
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The firms most suited to do their own research and portfolios also tended to have a team-based environment, "staffed with layers of stakeholders and asset-gatherers supported by the resources needed to customize portfolios, retain existing relationships, attract new clients, and build rapport with families' beneficiaries and outside advisors," Cerulli said.
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