Advisors hand off portfolio construction as models take center stage

Financial advisors are increasingly outsourcing portfolio construction as the demands of running a practice shift toward client growth and relationship management, according to new research.

Model portfolios are playing a larger role in that transition, reshaping how advisors spend their time and how asset managers compete for attention and Escalent’s report finds that more than four in ten advisors who already use model portfolios say they have increased their reliance on them over the past two years. That represents a sharp rise from 2023, highlighting how quickly adoption has accelerated as advisors look for efficiency.

The growing embrace of models coincides with a decline in advisors who view themselves as primarily “technical.” Escalent defines those professionals as spending at least 40% of their time on investment selection and portfolio construction. While 43% of advisors met that threshold in 2023, the share fell to 36% by 2025, suggesting that many are reallocating time away from hands-on portfolio work.

“We are seeing a clear shift where advisors are moving away from the technical aspects of the job to free up time for growing their business,” said Meredith Lloyd Rice, a vice president in Escalent’s Cogent Syndicated division. “Momentum is expected to continue, with three in ten advisors planning to rely more on model portfolios over the next year to gain portfolio management efficiency."

The study also points to changing expectations around how model portfolios are built. A large majority (82% of current users) now favor models that combine multiple investment vehicles rather than sticking exclusively to mutual funds.

That preference is opening the door for active ETFs, which remain lightly used in model portfolios today but are drawing strong interest from advisors evaluating future options. Blended approaches that pair active and passive ETFs generated the most enthusiasm.

One of the more notable findings challenges long-held assumptions about age and adoption. While younger advisors continue to be the heaviest users of model portfolios overall, the fastest growth in intent is coming from older advisors. Among those age 65 and older, the share planning to increase their reliance on models nearly doubled over two years.

“In a shift from 2024, when younger advisors were the most likely to report increased use, older cohorts are now 'catching up' to modernize their practice. Despite this shifting narrative, there is a distinct disconnect in how value is perceived across generations,” Lloyd Rice said. “Only 38% of advisors over 65 agree that model portfolios help to lower operational costs, compared to two-thirds of their younger peers. As more advisors begin to recognize portfolio management efficiency and increased time for business development as compelling benefits, it's clear that proving the tangible cost-efficiency will be the key hurdle for providers to overcome in reaching universal adoption."

Escalent’s annual report is based on a survey of roughly 400 financial advisors conducted in late 2025, all of whom manage at least $5 million in client assets. The findings suggest that as advisory businesses continue to evolve, model portfolios are less about investment delegation alone and more about enabling advisors to focus on the parts of the job that drive growth.