State Street Reports Advisors Driving More Assets to Model Portfolios

New data is showing how financial advisors are increasingly opting to move their assets into model portfolios. This is all according to a recent study from State Street Global Advisors. According to the State Street study, advisors that are using model portfolios now report that 39% of their total AUM sit within models. Back three years ago, that number sat at about 32%.

Diverse Portfolio Usage From State Street

Interestingly enough, advisors reported a nearly even usage of active, index, and blended model portfolios. 34% of advisors reported employing model portfolios that blended active and index strategies.

Meanwhile, 33% of advisors use index models, while the remaining 33% opt for active models. These astoundingly even results highlight how model portfolios can cater to a wide range of strategies.

Likewise, advisors also use a wide variety of methods for sourcing their model portfolios. 53% of advisors reported using third-party providers for their models, while 45% use a home office or broker-dealer. Interestingly enough, 54% of advisors reported that they build custom models.

“Model portfolios have evolved into a powerful tool for advisors seeking to scale their practices efficiently while enhancing the quality of personalized, client-centered wealth management,” noted Brie Williams, Global Head of Advisory Solutions and Wealth Intelligence at State Street Global Advisors. “By streamlining portfolio management, these solutions enable advisors to focus on delivering holistic financial planning and high-impact advice, positioning their practice for sustainable growth in an ever-changing market.”