Financial Advisors Shift to Outsourced Models, Diversify Portfolios Amid Market Volatility
Event summary
- Escalent's 2026 Advisor Brandscape® report reveals 54% of financial advisors now use model portfolios from asset managers, up from 35% using third-party models.
- Generative AI adoption surged to 68% among advisors in 2026, up from 49% in 2025, primarily for productivity and client meeting support.
- Advisors under 45 increased reliance on asset manager model portfolios from 20% in 2024 to 29% in 2026.
- Separately managed accounts (SMAs) adoption rose to 58% in 2026, while ETF allocations contracted to 27.5% from 32.6% in 2025.
- Alternative investment allocations among current users stand at 7.7%, expected to reach 10.7% by 2028.
The big picture
The financial advisory landscape is undergoing a structural shift as advisors prioritize client relationships over portfolio construction, driven by economic uncertainty and technological advancements. This trend is reshaping demand for outsourced solutions and diversified investment products, particularly among younger advisors. The broader industry implications include increased competition among asset managers to provide scalable, technology-enabled solutions that meet evolving advisor needs.
What we're watching
- Technology Integration
- How generative AI adoption will affect advisor productivity and client engagement over the next 24 months.
- Portfolio Strategy
- Whether the shift toward outsourced models will accelerate further as younger advisors dominate the industry.
- Asset Allocation
- The pace at which alternative investments move into the mainstream and impact traditional asset classes.