Financial advisors are widening the menu of investments they use, and many say they need more training to do it well. New findings say the push for product education and access to specialists is growing, as firms move past a mutual-fund-only model. The shift is reshaping how advisors build portfolios, communicate risk, and serve clients who expect more choice.
The research highlights a simple message for firms and advisors. To use new products effectively, they must understand structure, costs, and fit within a client plan. That message aligns with recent industry moves into exchange-traded funds, separately managed accounts, annuities, and private market options. The demand is rising as clients ask for income, tax control, and diversification.
“New research points to the value of product education and specialist insight as advisors diversify further beyond mutual funds.”
Why Advisors Are Expanding Their Toolkits
Over the last decade, product choice has expanded. ETFs have grown on the back of lower fees and tax efficiency. Model portfolios and SMAs offer more control over holdings and taxes. Income solutions, including annuities and structured notes, claim to reduce sequence risk for retirees. Private credit and real assets have appealed to clients seeking lower correlation to public markets.
Advisors say client goals are driving the change. Retirees want predictable cash flow. Younger clients seek thematic exposure and values-based screens. High earners want tax loss harvesting and personalized indexing. As a result, portfolios feature more sleeves and bespoke allocations, which increases complexity.
The Education Gap and Its Risks
Complex products require clear understanding. An ETF that uses derivatives can behave differently than a plain index fund. An income rider on an annuity may come with trade-offs. Liquidity limits in private funds can surprise clients in a downturn.
Specialist teams can help advisors match products to goals and explain the fine print. The research calls out the need for repeatable training, case studies, and point-of-sale support. Many firms are building training tracks that cover product mechanics, tax rules, and portfolio fit.
- Clarify how a product earns returns.
- Spell out fees and liquidity limits.
- Explain worst-case scenarios.
- Show where it fits in the plan.
Compliance, Suitability, and Client Communication
Regulatory pressure remains a key factor. Suitability and best-interest rules expect advisors to document why a product fits a client’s needs. Education helps create that record. It also equips advisors to translate technical terms into plain language clients can trust.
Firms report that effective training pairs product details with client conversations. For example, discussing sequence risk alongside an income product’s caps and floors. Or comparing the tax effects of ETFs, SMAs, and mutual funds in a single household plan. Better documentation and clearer explanations can reduce complaints and improve retention.
What Specialists Bring to the Table
Product and portfolio specialists can test allocations under different market paths. They can model drawdowns, stress test liquidity, and review fee layers across vehicles. Their input helps advisors avoid overlap, hidden leverage, or unintended factor bets.
Specialists also track platform changes and manager updates. They can flag when a product alters its strategy or when a new share class reduces cost. This timely insight supports better decisions and keeps portfolios aligned with the original plan.
Signals for the Year Ahead
Several trends are likely to continue. Advisors will keep using low-cost ETFs for core exposure. Interest in direct indexing may rise for tax control. Income products will stay in focus if rates remain higher than recent norms. Private credit may face more scrutiny on disclosures and liquidity.
Firms that invest in training and specialist access are positioned to gain. Advisors benefit from faster due diligence, better client education, and fewer surprises. Clients get clearer explanations and portfolios that match goals with risk.
As product shelves widen, the message is consistent. Education first. Then selection. Then documentation. That sequence supports better outcomes and helps advisors serve clients with confidence.
