Financial Advisors Shift Focus to Relationships, Boost Model Portfolio Use
Event summary
- 42% of financial advisors increased model portfolio usage over the past two years, up from 29% in 2023.
- Only 36% of advisors in 2025 spent at least 40% of their time on investment selection, down from 43% in 2023.
- 82% of model portfolio users now employ mixed-vehicle portfolios, creating demand for Active ETFs.
- Intention to rely more on model portfolios among advisors aged 65+ nearly doubled from 15% in 2023 to 27% in 2025.
The big picture
The shift away from technical investment tasks toward business development reflects a broader industry trend of advisors prioritizing client relationships over stock picking. This transformation is creating opportunities for third-party model providers and asset managers, particularly in the Active ETF space. The generational divide in perceiving the value of model portfolios suggests that providers will need to tailor their messaging to different age groups to achieve universal adoption.
What we're watching
- Adoption Pace
- Whether the momentum in model portfolio adoption among older advisors will sustain the current growth trajectory.
- Cost Efficiency
- How providers will address the generational disconnect in perceived cost-efficiency of model portfolios.
- Active ETF Demand
- The pace at which demand for Active ETF model portfolios will translate into higher usage rates.
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