MutualFundWire.com: FAs Don't Outsource Most Investment Management

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Thursday, February 27, 2025

FAs Don't Outsource Most Investment Management

When it comes to investment management, financial advisors still handle the vast majority of it themselves, according to new research from the folks at fundster-focused research and consulting firm.

Patrick "Pat" Newcomb
Fuse Research Network
Relationship Manager

Pat Newcomb, relationship manager at Fuse Research Network, reports that, per findings in their Advisor Top Trends for 2025 report (which is coming soon), FAs outsource investment management for an average of 25 percent of client assets. (This includes outsourcing to both third-party model portfolios, like those created by asset managers, as well as portfolios built by home offices.) Put another way, this means that FAs handle investment management decisions themselves for 75 percent of client assets.

Wirehouse FAs outsource the most, 31 percent on average. Next up are advisors affiliated with independent broker-dealers, who outsource an average of 30 percent. FAs with RIAs are way behind, at 18 percent.

"By offloading investment decisions, advisors can dedicate more time to financial planning and potentially bring on additional clients," Newcomb writes.

Newcomb notes that many FAs, 40 percent in total, say that they plan to up their usage of investment management outsourcing, by using it for a higher percentage of their client assets in the future. Yet he confirms that most FAs "are not planning to make any changes to their investment management outsourcing."

Printed from: MFWire.com/story.asp?s=69578

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