Advisers are looking for the benefits of customization that fintech partnerships like Principal’s arrangement can provide, according to FUSE Research Network founder and principal Neil Bathon. He added that Principal’s partnership with Smartleaf and its long-running sub-adviser approach makes its model offerings more credible than some rivals who are feeling the pressure to launch model lineups. “I think they check the boxes much more so than a lot of folks do,” Bathon said, “they’ve been delivering variations of picking managers and doing asset allocation for a long time.” According to research from FUSE, the model portfolio market is expected to grow 18% per year, providing a healthy landscape for firms like Principal to expand. The research estimates the third-party model market to be valued at $516bn this year, rising to $1trn by 2026.
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Article published on May 2, 2022