Cerulli finds only 7% of advisers at right scale to do portfolio construction themselves

Cerulli finds only 7% of advisers at right scale to do portfolio construction themselves
Research firm says advisory firms need at least $250 million in AUM to do proper job.
OCT 17, 2019
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. [More: Technology can help balance adviser portfolio discretion with firm controls] 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. [Recommended video: Advisers should discuss ESG with wealthy clients before someone else does] 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. Don't miss our Women Adviser Summit — coming to San Francisco.​

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