Advisors across all channels expect tax harvesting to become the most in-demand customization feature in portfolio construction as tax harvesting solutions become more available, according to the September 2025 Advisor Trend Monitor published by FUSE Research Network.
“As clients age and wealth disbursement needs to happen, they need to manage their tax positions and the solutions [to do that], whether through SMAs, direct indexing or custom products, have never been more available,” said Mike Evans, director of advisor and benchmark research with FUSE and the report’s author, who noted that taxes have increasingly become top of mind for advisors from a portfolio customization point over the last five years. “I think that’s going to continue to be a trend.”
FUSE found that, looking forward, advisors rated tax harvesting a 3.7 (on a scale of 1 to 5, with 5 indicating the greatest demand) among portfolio construction features for clients. Other in-demand customization features will likely involve vehicle integration of ETFs, unlisted closed funds and private funds (3.3 out of 5 overall), customized withdrawal plans (3.2 out of 5) and managing concentrated positions (3.1 out of 5).
Today, the primary drivers of portfolio construction decisions among advisors include maximizing risk-adjusted returns (cited by 44% of those surveyed) and maximizing diversification and asset class coverage (41%). Creating long-term wealth growth and maximizing downside risk protection were cited by 39% of advisors as the primary drivers of their decisions.
When it comes to RIAs specifically, 89% said that changes in clients’ goals/risk profiles were the most important driver of changes in portfolio allocations. Another 86% mentioned that clients’ liquidity needs and life events were of primary importance in their allocation decisions. Tax considerations came in fourth on the list, with 80% of RIAs citing them as an important factor.
Relationships With Asset Managers
The overwhelming majority of advisors (85%) work with multiple fund managers to receive portfolio construction advice, according to the FUSE survey. However, the figure is lower among RIAs (76%), compared to wirehouse advisors (88%) and independent broker/dealers (91%).
Advisors give top priority to risk analysis (55% of survey respondents) and portfolio optimization (53% of respondents) when looking for portfolio construction services from asset managers. They also place a high value on meeting with an asset manager’s investment specialist, according to FUSE Research. Over 60% of those surveyed rated the importance of speaking with an investment specialist as 3.7 on a scale of 1 to 5.
Preferences on Models
Fuse Research found that RIAs were more likely to use models for portfolio construction than wirehouse advisors or independent broker/dealers, with 57% of RIA client accounts allocated to models. That’s compared to the 44% allocation overall across all advisor channels.
“For RIAs, they don’t have as many home office solutions that someone like a wirehouse is going to have, so it’s going to drive them more to third-party models,” said Evans.
Fees and transparency on how fees are charged ranked as the top metric for how advisors evaluated third-party models, with 50% citing these as very important criteria. Another 49% cited the model providers’ track record, while 41% wanted evidence of a “clearly articulated investment process.”
On the other hand, the ability to customize models and the model provider’s reputation were rated as relatively unimportant, with 30% and 24% of advisors, respectively, saying they were “very important.”
“Obviously, track record and fees are going to be most important in any investment decision. We did anticipate customization being higher than it was in terms of importance,” said Evans. “It’s still there, but advisors are kind of prioritizing other aspects.”
Evans said the survey results were largely consistent with what FUSE has seen in the previous four years the survey was administered.
The survey included responses from 507 advisors, predominantly in the wirehouse, independent broker/dealer and RIA channels, with RIAs making up 26% of respondents. The average age of the survey respondents was 55, with 86% being male and 14% female advisors. The advisors were roughly evenly split between those who work as part of a team (48%) and those who work independently (52%). The average advisor included in the survey personally managed about $196 million in client assets.
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