Providers add alternatives, tax optimization capabilities to support broader adoption
A new report from Cerulli Associates defines and sizes the current and future opportunity in the asset allocation model portfolio landscape, including a review of the perspectives of the financial advisors, model marketplaces, and model providers. Access the full report here.
September 24, 2026, BOSTON—Asset allocation models are expanding to include a broader range of products, vehicle types, and tax optimization techniques.
As providers develop these enhancements, advisors can now apply model strategies to a larger client base, from mass-affluent to high-net-worth (HNW) investors, according to The Cerulli Report—U.S. Asset Allocation Model Portfolios 2026.
Asset managers are increasingly incorporating alternative exposures into their model portfolios. As alternative strategies become more accessible, many model providers see opportunity to reach a broader range of investors through their models.
According to the research, 57% of model providers cite incorporating semi-liquid/illiquid alternatives into models as a top-three product development initiative, an increase of 17 percentage points from the year prior. Among these providers, more than half place at least a minor focus on distributing models across all client segments, from the mass market (less than $100,000 in investable assets) to the wealth market ($5 million to $10 million).
Improving tax efficiency is also a crucial initiative for model providers, regardless of their client segment distribution focus. More than 80% of model issuers identify tax optimization services for taxable accounts as an important model service and support initiative, while 40% cite making models more tax-efficient for taxable client segments as a top-three product development initiative.
“Model providers see the importance of integrating tax optimization strategies for all client segments,” says Kevin Lyons, associate director. “Among those prioritizing this initiative, more than 40% report at least a minor focus on mass-market, middle-market, and mass-affluent clients, while close to 40% are focused on higher-wealth-tier clients. Higher-net-worth clients are particularly sensitive to tax efficiency, and solutions delivered through models offer an effective way for advisors to implement tax overlay strategies at scale,” adds Lyons.
As advisors seek to serve a broader range of clients, Cerulli recommends model providers continue focusing on tax optimization, customization, and alternatives exposure. “Incorporating these features into models enables advisors to reach a wider variety of client segments, including higher-wealth market tiers,” says Lyons. “As technology, customization, and tax management advance, model portfolios are poised to become an increasingly important vehicle for delivering personalized investment solutions, creating new opportunities for advisor adoption and model asset growth,” he concludes.
About Cerulli Associates
For over 30 years, Cerulli has provided global asset and wealth management firms with unmatched, actionable insights.
Headquartered in Boston, Cerulli Associates is an international research and consulting firm that provides financial institutions with guidance in strategic positioning and new business development. Our analysts blend industry knowledge, original research, and data analysis to bring perspective to current market conditions and forecasts for future developments.
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