BlackRock Inks GeoWealth Pact for Alternatives Access

BlackRock Inc. is joining with financial technology firm GeoWealth to provide access to customized model portfolios that include private investments alongside mutual funds and ETFs, a recognition of investors' increasingly sophisticated relationship with financial advisors. 

Inside BlackRock’s $115 billion model portfolio business, there is $31 billion in custom portfolios, representing the fastest growing area of model portfolios, according to Eve Cout, head of portfolio design and solutions within the U.S. Wealth Advisory business at BlackRock.

“What we’ve uncovered is that the models we’ve built are great for mass affluent clients, but as advisors engage with high-net-worth and ultra-high-net-worth-clients, they increasingly seek more diversified, personalized and tax-efficient strategies,” she said.

Cout said model portfolios today, which are increasingly anchored to exchange-traded funds, are growing fast. They represent approximately $4.2 trillion, which is nearly a quarter of the total investable wealth market, she said.

“Model portfolio assets are projected to reach nearly $10 trillion over the next five years,” she added.

The growth of model portfolios, even with the addition of private investments and other alternatives, is a key driver in the growth the ETF industry. This is because ETFs are typically the low-cost foundation of model portfolios offered on turnkey asset management platforms like Chicago-based GeoWealth.

The GeoWealth platform has more than $28 billion invested through more than 180,000 accounts and nearly 200 financial advisors.

New York-based BlackRock, the world’s largest asset manager, has multiple relationships with model portfolio platforms that are accessed by financial advisors. But the GeoWealth partnership is designed to offer customizable access to private markets investments starting in September.

By early next year, Cout said the GeoWealth platform will also provide access to direct indexing and separately managed accounts inside the various model portfolios.