• Most advisors (76%) use domestic equity strategies within the SMA structure. According to the advisors surveyed, the chief benefit of the SMA structure among the six considered in the survey is the ability for investors to harvest tax losses.
• Fixed-income strategies are the second most highly utilized SMA allocations, with independent broker/dealer (IBD) advisors reporting a higher usage than the other channels (58% vs. 50%). IBD advisors also reported greater use of multi-asset SMAs (58% vs. 42%).
• While advisors overall reported less use of bond ladders than equity, fixed income, international, or multi-asset SMAs, it is notable that the same percentage of wirehouse advisors use bond ladders (44%) and fixed income SMAs (44%). Moreover, wirehouse advisors and advisors with more than $500 million in client AUM exhibited the most use of bond ladders.
• This data on advisor use of SMAs by asset class offers relevant insights as asset managers consider where to expand their SMA offerings, and also as they contemplate potential demand for new strategies across the broader vehicle set including mutual funds and ETFs, particularly for taxable accounts.

SMA Strategy Use: % of Advisors

Source: FUSE Research Network, WealthManagement.com