Custom Models Dominate Portfolio Development, With RIAs Emerging as Key Growth Channel 

Custom models are cementing their role as the leading priority in the model portfolio landscape, according to The Cerulli Report—U.S. Asset Allocation Model Portfolios 2025. The study found that 65% of model providers rank custom models as a top-three initiative this year. Moreover, 71% of asset managers view custom models as a large opportunity and another 18% see them as a medium opportunity, underscoring the segment’s dominant position in future growth plans. 

Initially designed to serve broker/dealers (B/Ds) by offering platform-specific model portfolios, the custom model push is increasingly pivoting toward independent registered investment advisor (RIA) practices. Currently, about one-third of industry model assets are tied to custom arrangements—still concentrated between asset managers and B/Ds, but with a notable rise in demand from RIAs. 

“B/D demand for custom models has been well publicized, as the wirehouses and large national/regional B/Ds have the scale to demand their model provider partners align with their architecture, active/passive, vehicle, and capital market guidelines,” said Brendan Powers, director at Cerulli. “However, another emerging area of opportunity for custom models has been the independent channels, where RIA aggregators and large individual advisor practices have sought out models tailored to their needs. While these opportunities are likely to require more effort and resources up front, there may be more scalable growth if they receive favorable positioning among the firms’ financial advisors.” 

Cerulli emphasized that the changing role of advisors, particularly their shift toward planning and relationship management, will continue to serve as a tailwind for model adoption. Firms that position themselves effectively in custom engagements—especially those catering to RIAs—stand to capture outsized growth as the model portfolio market evolves.