As advisory firms become more business-minded and operationally focused, asset managers are rethinking how investment products are structured and delivered.
Mary Mock, Head of Distribution at Touchstone Investments, tells InvestmentNews that the shift is being driven less by pure performance considerations and more by scalability, segmentation and durable revenue models.
“Advisors today are thinking about operational scale, differentiated client experiences and durable revenue models, not just investment performance,” Mock says. “Product design is evolving to increasingly reflect those needs.”
She notes that this evolution is visible in structures that help streamline implementation across growing client bases, support tailored portfolio construction and reduce operational friction.
“That includes structures that streamline implementation across growing client bases, enabling tailored portfolio construction for different segments and reduced operational friction,” Mock says. “Vehicles that are flexible, transparent and easy to incorporate into models are particularly valuable as firms scale.”
Mock adds that actively managed ETFs are increasingly being used as liquid portfolio building blocks, while concentrated equity strategies can offer differentiated exposure for clients seeking higher-conviction allocations.
“At the same time, there’s greater alignment between product construction and how advisory firms monetize their services,” she says. “Fee-based advisory relationships favor structures that are cost-aware, tax-efficient and clean from a reporting standpoint.”
Differences across distribution channels are also shaping product development priorities. As RIAs, broker-dealers, hybrid firms and wirehouses operate under distinct regulatory and platform constraints, asset managers are being forced to think more holistically about wrappers and share classes.
“The fragmentation of distribution has meaningfully shaped product strategy,” Mock says. “RIAs, broker-dealers, hybrids and wirehouses each operate within distinct regulatory, compensation and platform frameworks, and that influences everything from share class selection to wrapper preference.”
She explains that RIAs often prioritize cost transparency, tax efficiency and flexibility, while broker-dealers and wirehouses may focus more heavily on platform compatibility and operational integration. Hybrid firms, meanwhile, need solutions that can function across advisory and brokerage environments.
“This has led to greater focus on offering both mutual funds and actively managed ETF wrappers across core equity and fixed income exposures, allowing advisors to select the vehicle that best aligns with their platform and client needs,” Mock says.
Ultimately, she argues that firms designing products with end-user implementation in mind — rather than retrofitting later — are better positioned to compete.
The rapid growth of model portfolios and outsourced CIO solutions is another key force reshaping product design. These approaches allow advisors to scale investment management while dedicating more time to client relationships and business development.
“The rise of model portfolios and OCIO solutions reflects advisors’ desire to scale investment management while focusing more time on client relationships and business development,” Mock says. “In that environment, ease of implementation is paramount.”
She points out that vehicles integrating cleanly into models — through trading efficiency, liquidity, transparency and operational simplicity — have a clear advantage.
“Vehicles must be built with rebalancing frequency, tax implications and reporting clarity in mind,” she says. “Even small structural inefficiencies can compound when portfolios are deployed across hundreds or thousands of accounts.”
Mock adds that this environment is also increasing demand for outcome-oriented strategies that complement broader model frameworks rather than functioning as standalone products.
“Asset managers that collaborate closely with model providers and advisory firms can help ensure their strategies function as building blocks within scalable portfolio architectures,” she says.
While tax efficiency and transparency have long been cited as key drivers of ETF adoption, Mock believes their impact on practice management is still underappreciated.
“Tax efficiency can enhance after-tax outcomes, which strengthens an advisor’s value proposition, particularly in high-net-worth and taxable client segments,” she says. “Portability supports client transitions and account consolidation, making it easier for advisors to onboard new relationships or navigate firm changes without disrupting portfolios.”
She also emphasizes the importance of transparency in strengthening client conversations.
“Transparency facilitates clearer client conversations around holdings and risk exposures,” Mock says. “Actively managed ETF structures have expanded advisors’ ability to deliver differentiated active strategies within a tax-aware and operationally flexible wrapper.”
Collectively, she argues, these features can help advisors build deeper relationships in increasingly competitive markets.
“Advisors who can deliver predictable implementation, cost clarity and tax-aware ideas are better positioned to differentiate their services and build deeper, longer-term client relationships,” she says.
In a crowded marketplace, Mock believes true advisor-centric product development begins with a deep understanding of how advisory businesses are evolving.
“True advisor-centric product development starts with listening,” she says. “It requires understanding not just where markets are heading, but how advisory businesses are evolving, including their operational constraints, compliance realities, client demographics and competitive pressures.”
She cautions that innovation without clear purpose is unlikely to resonate.
“Innovation for its own sake rarely resonates,” Mock says. “Advisors are seeking to solve tangible problems: manage risk in volatile environments, generate differentiated sources of return, improve tax outcomes or simplify implementation.”
Distribution realities must also be factored into product strategy, given limited platform shelf space and rigorous due diligence standards.
“Successful innovation tends to build on existing competencies and integrate seamlessly into established workflows rather than requiring wholesale change,” she says. “In many cases, that means refining access points, such as introducing ETF share classes or additional vehicles for existing strategies, rather than launching entirely new concepts.”
Ultimately, Mock sees the strongest partnerships emerging where product design is paired with ongoing business-building support.
“The most durable partnerships are built when asset managers combine thoughtful product design with ongoing support, offering not just strategies, but insight into how those strategies can help advisors grow, scale and serve clients more effectively,” she says. “That support can include practice analytics and formal practice management consulting programs that help advisors think through segmentation, pricing discipline, client engagement strategies and operational efficiency alongside portfolio construction.”
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