Model Portfolio & SMA Strategists Showcase - Flipbook - Page 11
SMAs & MODEL PORTFOLIOS
Model Portfolio Net
Flows, 2022–2025
BlackRock alone captured ~$30B
of the 2024 total—13x the nexthighest respondent
$38B
$23B
$14B
2022
2023
2025
Source: Morningstar 2025 US Model
Portfolio Landscape (survey-reported flows,
not exhaustive)
by-case for certain client types or preexisting relationships. That means the
largest, most recognizable providers
aren’t automatically accessible or
appropriate for every client segment an
advisor serves.
The due-diligence chapter (p. 22)
builds out the specific framework
for evaluating providers. For now,
the market-map takeaway is simple:
Assume that whichever household
names come up first in a screening tool
got there partly on scale rather than
pure merit, and screen accordingly.
A THIRD SOURCING CHANNEL:
BANK- AND TRUST-AFFILIATED
MANAGERS
Everything in this chapter’s market
map so far assumes access through
the TAMP and marketplace channels
covered in later chapters (pp. 14, 17).
There’s a third channel worth naming
on its own: managers operating inside
bank private-banking divisions and
trust companies, sourcing clients
directly through those institutions’
existing relationships rather than
through Envestnet, Orion, SMArtX, or
similar platforms.
These managers, often running the
bespoke discretionary structure
described earlier (p. 8), tend to serve
UHNW clients with $1 million-plus
minimums, and their institutional parent
typically provides real advantages
in fixed-income trading access and
custodial stability. The trade-off is worth
naming plainly rather than assuming
away. A bank- or trust-affiliated
manager may face incentives, explicit
or structural, to steer clients toward
the parent institution’s own custody,
lending, or banking products as part
of the broader relationship. That’s not
disqualifying. Plenty of advisors work
productively with these managers
specifically because the parent’s
balance sheet delivers real client benefit.
But it’s a channel an advisor who only
screens TAMP marketplaces will never
see, and it’s worth actively seeking out
for UHNW clients whose needs exceed
what a marketplace model or standard
SMA can offer.
ADVISOR LENS
When a marketplace
search won’t find
your best option
A UHNW client with $2 million in
investable assets may be better served
by a bank trust department’s bespoke
portfolio manager than anything in
Envestnet or Orion. If you only screen
TAMP marketplaces, you’ll never see this
channel. Worth a direct call to a private
bank’s wealth division before assuming
the marketplace has covered the field.
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One specific product worth
understanding in this channel is
securities-based lending, where a
client borrows against the value of their
managed portfolio as collateral rather
than liquidating positions to raise cash.
A bank-affiliated manager’s parent
institution is often best positioned
to offer this directly, since it already
holds the custody relationship and
the balance sheet to lend against it.
Done well, this lets a client access
liquidity, for a home purchase, a
business opportunity, a tax bill, without
triggering the capital gains a sale would
generate, complementing the taxmanagement thesis that runs through
the rest of this guide.
Done poorly, it’s a way for a bankaffiliated manager to deepen a client’s
dependence on the parent institution’s
full product suite beyond what the
investment relationship alone would
justify. The same due-diligence instinct
applies here as everywhere else in
this chapter: Understand the incentive
before accepting the convenience.
