Financial advisors are stepping back from hands-on portfolio construction at an accelerating pace as younger planners demonstrate different ideas about where their time is best spent.
The findings come from Escalent's 2026 Advisor Brandscape report, published September 9, 2026, by the Livonia, Michigan-based market research firm's Cogent Syndicated division. The annual survey tracks practice models, product usage, and brand perception across the financial advisor landscape in the United States.
According to the report, advisors now spend the majority of their time (59 percent) on building and maintaining client relationships, compared with just 34 percent on portfolio construction. That gap widens further among advisors under 45, who are gravitating toward outsourced and technology-assisted options at a faster clip than their older peers.
While self-built model portfolios remain the most common construction method overall, frequent use declined in 2026 and a growing segment of advisors say they have stopped creating models themselves entirely.
More than half of respondents (54 percent) reported using model portfolios offered by asset managers, while just over one-third (35 percent) indicated using third-party models from other providers.
Those under 45 who reported always or often using asset manager model portfolios rose from 20 percent in 2024 to 29 percent in 2026, according to Escalent's data. The pattern aligns with broader industry findings on model portfolio adoption that have pointed to efficiency and scalability as primary drivers of the outsourcing trend.
"Technology and outsourced portfolio management aren't replacing advisors - they're changing how advisors spend their time and deliver value for their clients," said Meredith Lloyd Rice, lead report author and a vice president in Escalent's Cogent Syndicated division. "With these tools at their disposal, advisors are able to devote more time to providing personalized guidance, building trust and helping clients navigate an increasingly complex financial landscape."
For generative AI, usage among advisors surged to 68 percent in 2026, up from 49 percent the prior year. Top applications included productivity enhancement, client meeting support, investment research, and summarizing market insights.
Beyond how portfolios are built, the Escalent report also captures notable shifts in what advisors are putting inside them.
Adoption of separately managed accounts expanded to 58 percent in 2026, up from 51 percent in 2024, driven largely by younger advisors. Average ETF allocations contracted to 27.5 percent in 2026 from 32.6 percent the prior year, though Escalent projects a rebound and expects ETFs to continue capturing the largest share of new dollars. Mutual fund allocations, meanwhile, fell to 19.3 percent in 2026 from 23.0 percent in 2024 and are expected to continue declining.
Advisors also moved meaningfully into international and emerging markets equities. Active non-US equity exposure rose to 36 percent in 2026 from 28 percent in 2025, while emerging markets equity climbed to 32 percent from 20 percent over the same period, per Escalent's findings.
Alternative investments continued their march into mainstream advisor portfolios. Average allocations among current users stood at 7.7 percent and are projected to reach 10.7 percent by 2028, according to the report. The growing use of alternatives among independent advisors reflects a broader industry shift as clients seek diversification beyond public markets.
The Escalent report carries a direct message for asset managers competing for advisor mindshare: the firms best positioned to win relationships are those that understand how advisors' workflows are evolving, not just what products they want.
"Advisors want partners that can help them cut through complexity with timely insights, practical guidance and investment solutions that support their clients' changing needs," said Linda York, a senior vice president in Escalent's Cogent Syndicated division. "Firms that understand how advisors are adapting, and can meet them where they are, will be best positioned to win advisor mindshare and build strong, long-term relationships in a rapidly evolving market."
The findings reinforce a pattern that research firms including Cerulli Associates have tracked for several years, that portfolio construction is becoming increasingly commoditized, and that advisors who embrace outsourcing are able to redirect time toward planning conversations that are harder to replicate and more valued by clients.
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