Creating Custom Models Top Priority for Model Providers

New research from Cerulli Associates shows launching custom models for the independent RIA channel is among the top priorities for model providers.

According to Cerulli, at year-end 2024, there were $2.5 trillion assets in model portfolios, up 16% from the year before. Broker/dealers and advisory TAMPs accounted for the vast majority (72%) of that figure, while asset managers and third-party strategists accounted for most of the remaining assets.

Cerulli’s most recent survey of these model providers found that 65% of them view building out custom models for broker/dealers and enterprise RIA home offices as their top product development initiative this year. Another 40% cited incorporating semiliquid and illiquid alternatives into their models as among 2025’s top priorities, while 33% also focus on incorporating different investment vehicle wrappers into their models.

As of 2024, the custom model market was dominated by just two players—Wilshire and BlackRock, according to research from Morningstar. Together, they accounted for 75% of assets in custom models.

“Customization—enabling enterprise home office or large advisor practices to incorporate their preferences into a model while maintaining the outsourced asset allocation framework—is a top initiative for many model providers,” said Kevin Lyons, senior analyst at Cerulli and one of the report’s authors, in a statement. Lyons noted that model providers would benefit from working with distribution platforms and employing portfolio construction consultants to offer customer support to RIAs interested in custom models

Related:After Rate Cut Powell Says Jobs Market No Longer Very Solid

“It is this level of client experience that can help differentiate model solutions beyond just performance, price and investment philosophy,” he said.

In recent months, multiple large financial intermediaries, including Fidelity and Goldman Sachs, started offering custom models incorporating private market options to advisors on their platforms. In many cases, the intermediaries have partnered with TAMPs and alternative investment platforms to help advisors access such models more efficiently.

A majority (56%) of surveyed model providers also indicated that their firm is either already incorporating or considering incorporating semiliquid and illiquid alternative investments into their models. In all, 44% cited significant demand from financial advisors for models with such assets, and 42% said that offering such models would unlock new segments of demand in the advisor market.