Wealth Management
Derivative income ETFs are gaining momentum with financial advisors as firms broaden their income-generation strategies amid ongoing market volatility and shifting client expectations. Cerulli Associates reports that 15.2% of advisors used derivative income strategies in 2024, with another 7% planning to adopt them, led by strong uptake in wirehouses and increasing interest across independent and regional broker-dealers.
Defined as liquid alternatives that generate income through option-selling, these ETFs drew $26 billion in net inflows in 2023 and $29 billion in 2024, with advisor demand expected to continue rising.
Cerulli notes that inflation-beating returns and expanding issuer participation are driving growth, as the ETF structure reshapes how income-oriented solutions are designed and delivered.
Finsum: Defined outcome ETFs are also expanding, as investor demand for downside protection and predictable outcomes continues to strengthen.
Working with high-net-worth (HNW) clients offers advisors the opportunity to grow assets under management and revenue, but winning these relationships requires delivering more specialized expertise. Wealthy investors tend to prioritize education, performance and deep relationship-building, while focusing heavily on wealth preservation and legacy planning.
Surveys show that most HNW households plan to transfer wealth during their lifetimes, worry about healthcare costs and inflation, and are highly engaged in charitable giving, valuable insights that can help advisors shape their service models.
To meet this demand, firms can expand into estate planning, succession planning, tax strategy and other complex services that align with affluent investors’ needs. Advisors who collaborate with estate attorneys, CPAs and other centers of influence may find it easier to build credibility and attract HNW prospects through referrals.
Finsum: Ultimately, growing an advisory practice in the HNW segment comes down to offering sophisticated, personalized planning that speaks directly to the financial realities.
The Great Wealth Transfer, an estimated $90 trillion shifting across generations over the next two decades, is poised to reshape advisor–client relationships, yet most affluent investors remain underprepared for the transition. Nearly one-third of wealthy investors lack even a basic will or trust, and many who do have plans will require significant updates as their lives, assets, and tax environments evolve.
The research identifies four distinct motivational segments—Financial Achievers, Leisure Seekers, Legacy Leavers, and Cautious Givers—each defined by emotional drivers that meaningfully shape how clients view wealth, planning, and risk.
With younger generations showing a higher affinity for digital tools yet still wanting human guidance, advisors must blend personal expertise with accessible online solutions to meet clients where they are.
Finsum: Ultimately, those who tailor their estate-planning approach to individual psychology will be the ones who thrive as this massive transfer of wealth unfolds.
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Advisors are increasingly adopting outsourced model portfolios as a way to streamline investment management and redirect their time toward deeper client relationships and higher-value planning work.
Research from Cerulli shows that model users spend just over 10% of their time on investment oversight, enabling them to devote more than 60% of their time to client-facing activity and business development. The trend is especially pronounced among younger advisors running leaner practices, many of whom lack in-house investment staff and rely on models to achieve greater efficiency.
These advisors view outsourced portfolios as a strategic tool, using the time savings to focus on complex planning, attract wealthier households, and sharpen their competitive positioning. High demand for product education, best practices, and access to portfolio managers underscores the need for model providers to keep advisors well-informed.
Finsum: While some advisors avoid models due to concerns about customization or added fees, the overall shift highlights how outsourcing has become central to scaling a modern advisory practice.
Many advisory firms struggle with data overload and disconnected systems, leaving advisors buried in manual reconciliation instead of client work.
After adopting an AI analytics tool that unified his systems, advisors can shift from static, outdated reports to real-time insights that flagged portfolio drift, client engagement changes, and emerging trends. Industry research reinforces this shift, with firms that embed AI reporting major efficiency gains and freeing teams to spend more time on strategic, insight-driven work.
By automating even a single pain point—like performance drift alerts—this advisor’s firm reduced hours of manual tasks each week, improved client communication, and boosted team morale.
Finsum: AI isn’t replacing advisors, but empowering them to make faster, clearer decisions by transforming scattered data into living intelligence.
U.S. stocks climbed for a fourth straight session as renewed strength in the tech sector and rising expectations of a December Federal Reserve rate cut boosted investor confidence. Nvidia’s strong earnings and guidance helped calm last week’s concerns about inflated tech valuations, while Dell’s upbeat revenue forecast added further momentum to the AI-driven rally.
Comments from Fed officials signaling a more dovish stance contributed to growing market conviction, with futures now pricing in an 84.9% chance of a quarter-point cut next month. Travel-related stocks surged as airlines benefited from the year’s busiest travel day, offering a positive signal for consumer health heading into the holiday shopping season.
Economic data showed stronger-than-expected capital goods orders and mixed labor market signals, reflecting both corporate resilience and softening consumer sentiment.
Finsum: All eyes will be on the Fed, as the economy’s positive performance could mean no cuts before the first of the year.