Portfolio customization and tax management were once reserved for a financial advisor’s wealthiest clients. That era is ending. Tax efficiency and customization are fast becoming core components of wealth management beyond the top income tiers.
Cerulli’s report shows that newer, innovative technology and rising investor expectations are opening the door to tax-aware portfolio customization for mass affluent households. For financial advisors, this shift is a chance to deepen relationships—if they can scale these capabilities.
Benchmarking high net worth investors
According to Cerulli, the share of financial advisor assets managed for high net worth (HNW) clients (with more than $5 million to invest) rose to 66% in 2023, reaching $20.6 trillion.1 These clients expect sophisticated solutions, including tax optimization, direct indexing and customized separately managed accounts. Advisors serving HNW clients know that customization is no longer a “nice to have”—it’s now the price of admission.
Scaling customization
Smarter technology is making personalized customization available for mid-wealth households. Asset managers with upgraded platforms can now offer customization and tax management at lower account minimums. Direct indexing, once considered a tool for ultra-wealthy investors, is now being extended to mass affluent households (with less than $2 million in assets).
Although many financial advisors may still view tax management as a HNW differentiator, Cerulli’s data suggests the market is shifting. Many wealth managers, asset managers and technology providers are working to scale these services for the mass affluent tier.
Consider the benefits of active tax management
Building a competitive edge
Nearly 80% of affluent investors say they want accounts tailored to their specific circumstances, and 69% also want their provider to help cut their tax bill. To stay competitive, financial advisors should be equipped to offer customization and tax management services.
While one option may be leveraging firm-provided tools, these may fall short on sophistication or scalability. By partnering with a specialized asset manager like Parametric, advisors have access to best-in-class solutions that they can integrate into their current practice.
The bottom line
As customization moves from HNW to mass affluent investors, clients now expect tax efficient solutions across wealth tiers. Advisors who want to stay ahead should consider embracing technology and leveraging partnerships to deliver tax-aware portfolios at scale.
To explore all the data and insights, download the full Cerulli report here.
1 Source for data in this blog: Customized at Scale: A Framework for Next-Generation Advisory Platforms, October 2025. Cerulli Associates is an international research and consulting firm that provides financial institutions with guidance in strategic positioning and new business development. This study was sponsored by Parametric. Parametric is not affiliated with Cerulli Associates or any of its affiliates.
Parametric and Morgan Stanley do not provide legal, tax, or accounting advice or services. Clients should consult with their own tax or legal advisor prior to entering into any transaction or strategy described herein.
The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Parametric and its affiliates disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Parametric are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Parametric strategy. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results. All investments are subject to the risk of loss. Prospective investors should consult with a tax or legal advisor before making any investment decision. Please refer to the Disclosure page on our website for important information about investments and risks.
12.17.2027 | RO 5067786
