State Street Global Advisors Study Finds Assets in Model Portfolios Rising as Advisors Focus on Efficiency, Holistic Planning and Client Satisfaction

• Overwhelming majority of advisors are leveraging models: less than 1-in-20 advisors do not use model portfolios at all
• Investors who have assets in models are more satisfied with their advisor

State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT) today released the results of its Model Portfolios: Adaptive Solutions for Advisory Growth research, in which advisors report having an average of 39% of current assets under management in model portfolios - up from 32% three years ago.

“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,” said 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.”

Model Portfolio Utilization and Use-Cases

More than half of surveyed advisors (54%) utilize custom (self-built) models for clients while 45% source models available on their home office/broker-dealer platform, and 53% source from third-party providers.

The top factors advisors consider when selecting model portfolio partners include commitment from providers (30%), performance (29%), and price (27%). Notably, 85% of advisors believe tax personalization is a benefit of using models.

The research finds that the types of model portfolios utilized do not differ significantly between investors’ net worth or age, but rather on clients’ goals and other aspects of their financial situation. This tracks with what investors see as top benefits of having their assets in model portfolios:

• My advisor can spend more time helping me make more intelligent financial planning decisions (89%)
• My advisor can focus on what really matters to me (86%)
• My advisor can be more flexible to my needs (85%)

Gaps Between Advisor, Investor Views on Fees, Value

The research also uncovers a sizable perception gap between financial advisors and investors when it comes to understanding fees and being satisfied with value. While most advisors (87%) believe their clients understand their fees, just 58% of clients say they understand. Similarly, 88% of advisors think clients are satisfied with the value for fees paid while 63% of clients feel this way.

When asked what would improve the value of the services they receive from their advisor, clients’ top three responses include:

• Better returns (51%)
• Lower fees (46%)
• More proactive reporting (27%)

Conversely, the top three responses advisors provided when asked what would improve the value of services they are providing to clients include:

• Spending more time helping clients make more intelligent financial planning decisions (40%)
• Portfolio having a track record that fits risk tolerance (38%)
• Portfolio being constructed by asset managers with more knowledge of markets (38%)

Satisfaction With Advisor Higher Among Investors In Models

Investors who know their assets are in model portfolios are more likely to be satisfied with their financial advisor than investors who don’t know or who have no assets in model portfolios.

Nearly all investors in model portfolios (95%) are satisfied with their advisor’s ability to earn their trust and confidence compared to 79% of investors without assets in models. Similarly, 93% of investors in models are satisfied with their advisor’s understanding of their financial goals, compared to 79% of investors without assets in models. Notably, 51% of advisors said clients expect an element of customization/personalization.

Investors with assets in models are also more satisfied with the fees they pay for the value of services they receive, as 79% of model investors are satisfied with their fees compared to 56% of investors without models.

Despite the growth of and satisfaction with model portfolios, investors awareness has not improved during the past five years. Among investors, just over half (57%) of investors are aware of model portfolios - unchanged from 2019.

“There is a sizeable group of investors who need more information and education on model portfolios,” added Williams. “The return on investing in client education is significant for advisors. Not only do model portfolios help advisors manage their time more effectively, but they also create opportunities to meet client expectations in ways that enhance satisfaction and foster long-term relationships.”

For more information, read State Street Global Advisors’ Model Portfolios: Adaptive Solutions for Advisory Growth or visit the State Street ETF Model Portfolios landing page.

About State Street Global Advisors’ Model Portfolios: Adaptive Solutions for Advisory Growth Research, March-May 2024

State Street Global Advisors Research Center, in partnership with A2Bplanning and Prodege, conducted an online survey among 200 financial advisors with assets under management (AUM) of $25M or more and 250 individual investors in the US who work with a financial advisor and have investable assets of $500K.

In the United States, an online survey among 200 financial advisors with assets under management (AUM) of USD 25M or more. Data was collected from May 3–14, 2024.

In the United States and Australia, an online survey of 250 individual investors (each country) who work with a financial advisor and have investable assets (IA) of USD $500K or more. Data was collected from May 3–28, 2024.

The information presented in this press release is specific to the US region.

About SPDR Exchange Traded Funds

SPDR ETFs are a comprehensive family spanning an array of international and domestic asset classes. The funds provide investors with the flexibility to select investments that are aligned to their investment strategy. For more information, visit www.ssga.com.

About State Street Global Advisors

For over four decades, State Street Global Advisors has served the world’s governments, institutions, and financial advisors. With a rigorous, risk-aware approach built on research, analysis, and market-tested experience, and as pioneers in index and ETF investing, we are always inventing new ways to invest. As a result, we have become the world’s fourth-largest asset manager* with US $4.73 trillion^† under our care.

*Pensions & Investments Research Center, as of 12/31/23. ^†This figure is presented as of September 30, 2024 and includes ETF AUM of $1,515.67 billion USD of which approximately $82.59 billion USD in gold assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated. Please note all AUM is unaudited.

Important Risk Disclosures

Investing involves risk including the risk of loss of principal.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.

Diversification does not ensure a profit or guarantee against loss.

The trademarks and service marks referenced herein are the property of their respective owners. Third party data providers make no warranties or representations of any kind relating to the accuracy, completeness or timeliness of the data and have no liability for damages of any kind relating to the use of such data.

Investing involves risk including the risk of loss of principal.

This communication is not intended to be an investment recommendation or investment advice and should not be relied upon as such.

Intellectual Property Information: The S&P 500® Index is a product of S&P Dow Jones Indices LLC or its affiliates (“S&P DJI”) and have been licensed for use by State Street Global Advisors. S&P®, SPDR®, S&P 500®, US 500 and the 500 are trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and has been licensed for use by S&P Dow Jones Indices; and these trademarks have been licensed for use by S&P DJI and sublicensed for certain purposes by State Street Global Advisors. The fund is not sponsored, endorsed, sold or promoted by S&P DJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of these indices.

Not FDIC Insured · No Bank Guarantee · May Lose Value

State Street Global Advisors, 1 Iron Street, Boston, MA 02210-1641

© 2024 State Street Corporation

All Rights Reserved.

7368170.1.1.AM.RTL Exp. Date: 12/31/2025

View source version on businesswire.com: https://www.businesswire.com/news/home/20241209434834/en/