- BlackRock (BLK, Financial) and Envestnet collaborate to offer custom model portfolios for RIAs.
- BlackRock's managed model portfolios are projected to grow from $5 trillion to $10 trillion in the next four years.
- The new offering includes traditional ETFs and mutual funds, with plans to incorporate SMAs, private markets, and alternative investments.
Envestnet has announced a collaboration with BlackRock (BLK) to launch custom model portfolios designed specifically for registered investment advisors (RIAs). This announcement was made at the Elevate conference in Las Vegas.
The collaboration merges BlackRock's portfolio design expertise with Envestnet's leading Unified Managed Account (UMA) technology. This partnership enables RIAs to deliver personalized and tax-efficient investment strategies while providing them a seamless way to manage client investments in a single account.
The newly launched portfolios will initially comprise traditional exchange-traded funds (ETFs) and mutual funds. However, there are plans to soon expand into Separately Managed Accounts (SMAs), private markets, and alternative exposures. This expansion reflects a strategic move to tap into diverse asset classes and cater to varied client investment preferences.
Currently, BlackRock manages approximately $300 billion in model portfolio assets globally. The firm anticipates that its managed model portfolios will roughly double in the next four years, growing from $5 trillion to an expected $10 trillion. This projection highlights BlackRock's commitment to expanding its market share in the rapidly growing model portfolio sector.
The partnership with Envestnet, which has been a decade in the making, allows RIAs to offer institutional-quality portfolios without incurring additional costs. This enables financial advisors to scale their practices effectively, reduce operational risk, and focus more on enhancing client relationships. According to Envestnet's 2022 research, firms that allocate over 75% of their practice to model portfolios consistently achieve higher valuations.
