Study finds 85 percent of advisers use model portfolios

Study finds 85 percent of advisers use model portfolios
Broadridge found 78% of advisers believe clients care more about planning than outperformance.
JUN 06, 2019

Eighty-five percent of financial advisers currently use model portfolios, with 54% of advised assets being managed through the tools, according to a study by Broadridge Financial Solutions. Business scalability is a main driver of model portfolio adoption or consideration, according to 65% of advisers using them and 35% of those not using them. Other top reasons advisers use models include leveraging investment management experts (50%), focusing efforts on client building and retention (47%), and better addressing compliance and regulation (36%). (More:Morningstar study says advisory clients are stuck on investment performance) "Seventy-eight percent of financial advisers believe that their clients care more about planning, service and support than outperforming the market," Broadridge said in a release, adding that "83% agree that model portfolios are essential to allowing more time for financial planning." Concerns about model portfolio usage remain, particularly among the 15% of respondents not using model portfolios to any degree, Broadridge found. Of that group, 69% said they will definitely or probably not begin to use models in the next two years; 59% view managing money as part of their value-add for clients and 51% believe that their clients are expressly paying for customized solutions. (More:Outsourcing is route to greater growth, Fidelity study finds) Other concerns: 51% believe that model portfolio usage makes it harder to differentiate themselves from robo-advisors, 46% believe that model portfolios are not as effective in down or highly volatile markets, 45% believe model portfolios make it harder to assess risk, and 35% believe that clients will view them as lazy for using models.

Latest News

Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones
Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones

With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.

Insured Retirement Institute urges Labor Department to retain annuity safe harbor
Insured Retirement Institute urges Labor Department to retain annuity safe harbor

A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.

LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors
LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors

"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.

Mercer Advisors expands in Florida with $1.2B AUM next-gen team
Mercer Advisors expands in Florida with $1.2B AUM next-gen team

It's the mega-RIA firm's third $1B+ acquisition in just three months.

WisdomTree to acquire $1.85B AUM specialist asset manager
WisdomTree to acquire $1.85B AUM specialist asset manager

The deal marks a strategic entry into private asst markets for the ETP, ETF innovator.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.