Advisors throughout all channels anticipate tax harvesting to turn out to be probably the most in-demand customization function in portfolio development as tax harvesting options turn out to be extra out there, in line with the September 2025 Advisor Development Monitor printed by FUSE Analysis Community.
“As purchasers age and wealth disbursement must occur, they should handle their tax positions and the options [to do that], whether or not by SMAs, direct indexing or customized merchandise, have by no means been extra out there,” mentioned Mike Evans, director of advisor and benchmark analysis with FUSE and the report’s creator, who famous that taxes have more and more turn out to be prime of thoughts for advisors from a portfolio customization level over the past 5 years. “I believe that’s going to proceed to be a pattern.”
FUSE discovered that, wanting ahead, advisors rated tax harvesting a 3.7 (on a scale of 1 to five, with 5 indicating the best demand) amongst portfolio development options for purchasers. Different in-demand customization options will doubtless contain car integration of ETFs, unlisted closed funds and personal funds (3.3 out of 5 total), personalized withdrawal plans (3.2 out of 5) and managing concentrated positions (3.1 out of 5).
At this time, the first drivers of portfolio development choices amongst advisors embody maximizing risk-adjusted returns (cited by 44% of these surveyed) and maximizing diversification and asset class protection (41%). Creating long-term wealth progress and maximizing draw back danger safety have been cited by 39% of advisors as the first drivers of their choices.
In the case of RIAs particularly, 89% mentioned that adjustments in purchasers’ targets/danger profiles have been a very powerful driver of adjustments in portfolio allocations. One other 86% talked about that purchasers’ liquidity wants and life occasions have been of major significance of their allocation choices. Tax concerns got here in fourth on the listing, with 80% of RIAs citing them as an vital issue.
Relationships With Asset Managers
The overwhelming majority of advisors (85%) work with a number of fund managers to obtain portfolio development recommendation, in line with the FUSE survey. Nevertheless, the determine is decrease amongst RIAs (76%), in comparison with wirehouse advisors (88%) and unbiased dealer/sellers (91%).
Advisors give prime precedence to danger evaluation (55% of survey respondents) and portfolio optimization (53% of respondents) when on the lookout for portfolio development providers from asset managers. Additionally they place a excessive worth on assembly with an asset supervisor’s funding specialist, in line with FUSE Analysis. Over 60% of these surveyed rated the significance of talking with an funding specialist as 3.7 on a scale of 1 to five.
Preferences on Fashions
Fuse Analysis discovered that RIAs have been extra doubtless to make use of fashions for portfolio development than wirehouse advisors or unbiased dealer/sellers, with 57% of RIA consumer accounts allotted to fashions. That’s in comparison with the 44% allocation total throughout all advisor channels.
“For RIAs, they don’t have as many dwelling workplace options that somebody like a wirehouse goes to have, so it’s going to drive them extra to third-party fashions,” mentioned Evans.
Charges and transparency on how charges are charged ranked as the highest metric for the way advisors evaluated third-party fashions, with 50% citing these as essential standards. One other 49% cited the mannequin suppliers’ observe report, whereas 41% wished proof of a “clearly articulated funding course of.”
Alternatively, the skill to customise fashions and the mannequin supplier’s popularity have been rated as comparatively unimportant, with 30% and 24% of advisors, respectively, saying they have been “essential.”
“Clearly, observe report and costs are going to be most vital in any funding determination. We did anticipate customization being larger than it was by way of significance,” mentioned Evans. “It’s nonetheless there, however advisors are sort of prioritizing different facets.”
Evans mentioned the survey outcomes have been largely per what FUSE has seen within the earlier 4 years the survey was administered.
The survey included responses from 507 advisors, predominantly within the wirehouse, unbiased dealer/seller and RIA channels, with RIAs making up 26% of respondents. The common age of the survey respondents was 55, with 86% being male and 14% feminine advisors. The advisors have been roughly evenly break up between those that work as a part of a staff (48%) and those that work independently (52%). The common advisor included within the survey personally managed about $196 million in consumer belongings.
