The RIA landscape is evolving at breakneck speed, with rapid growth creating both opportunities and operational challenges for firms across the wealth spectrum. As advisors and aggregator firms expand their client bases and assets under management, the traditional one-size-fits-all approach to portfolio management increasingly falls short of meeting diverse client needs while maintaining operational efficiency.
Russell Investments, with nearly nine decades of experience as a global asset manager and investment consultant, bridges that divide with a solution that aims to close the gap between standardization and personalization through custom model strategies. Troy Espeseth, Managing Director and Head of US Strategic Accounts at Russell Investments, sat down with The Wealth Advisor at the 2025 Future Proof Festival in Southern California to discuss how Russell Investments is reshaping the model strategy conversation—moving from rigid frameworks to a more adaptive, partnership-driven approach.
The DNA of Customization
For Russell Investments, model strategies aren’t a recent addition to their service offerings—they’re foundational to the firm’s identity. “Russell Investments is a firm that model strategies is really in our DNA. It’s in our heritage,” Espeseth says. “We’ve been providing model strategies for advisors for four decades. Usually, model strategies mean cookie cutter, only one type of model, but custom model strategies is anything but cookie cutter.”
The distinction is crucial. With traditional model strategies, advisors and their clients often select among predetermined frameworks that may not align with specific preferences, risk tolerances, or investment philosophies. Russell Investments’ custom approach flips the script. “It’s one framework and many different paths around that,” notes Espeseth. “It’s customized for the advisor and the client but still getting all the operational efficiencies of a model strategy.”
Addressing the Growth Challenge
The RIA sector’s rapid expansion has created a paradox: growth brings opportunity but also operational strain. Espeseth describes how Russell Investments’ custom model strategies are designed to directly address the pressures growing advisory firms face.
“We can take a lot of that heavy lifting off of the RIA’s shoulders. We can help with the portfolio construction, the asset allocation, the rebalancing, the due diligence, the oversight—but still take into consideration the advisor’s preferences,” he says.
Rather than asking advisors to abandon their investment philosophies or preferred managers, Russell Investments builds around what’s already working. Many RIAs have cultivated relationships with money managers over years, developing investment strategies that reflect their unique approach to client service. Russell Investments’ methodology honors these established relationships while adding institutional-grade infrastructure.
“So, what we’re trying to do is not have them fit into our model. We are building a model strategy around theirs, so it’s getting the efficiencies of a model strategy but customized for that RIA or that aggregator firm,” Espeseth emphasizes.
The Partnership Paradigm
Rather than dictating investment approaches or offering advisors only predetermined structures, Russell Investments’ collaborative model centers on understanding each firm’s unique strengths and client base before building solutions around existing frameworks. “We are working in partnership with the RIA,” Espeseth explains. “We want to make sure that we are customizing these model strategies for their client base, for their preferences, and making sure that it’s both our insights into the model strategy.”
Russell Investments’ institutional heritage provides the foundation for delivering sophisticated capabilities. The firm has been serving institutional clients globally for decades, accumulating expertise in manager research, asset allocation, due diligence, and portfolio oversight. “Let’s take all of our capabilities and incorporate that into a model strategy for an RIA—that is really what custom model strategies is,” he says.
The collaboration extends well beyond basic portfolio construction, encompassing the firm’s fundamental investment philosophy. Rather than positioning itself as a traditional asset manager seeking to capture the entire portfolio, Russell Investments operates from an open-architecture perspective that acknowledges the value of multiple specialized managers.
“Russell Investments is really in a category of its own. We are not a traditional asset manager,” Espeseth believes. “We have an open-architecture approach. We feel that there’s not one asset manager that should manage the entire portfolio, but if we can take our institutional capabilities and pair that with the preferences of the advisor and then wrap all of that with the end-to-end operational support,” advisors can focus on what they do best: serving clients and growing their businesses.
Operational Efficiency Meets Growth
For many RIAs, building robust in-house investment infrastructure isn’t feasible. Hiring analysts, running trading desks, and performing due diligence on managers requires major resources. “From an RIA perspective, it is very expensive to build all of that,” Espeseth points out. “Lean into our expertise and our resources, and in partnership with the RIA, that is where the growth can still happen.”
By outsourcing the heavy lifting, advisors can direct energy toward client relationships and business development—without surrendering control over their philosophy or client strategies.
“We’re not forcing you into our model,” Espeseth says. “We’re building one around yours, and it’s really just you leaning into and the RIA leaning into the operational efficiencies behind it so you can focus on growth so that RIA and that aggregator can focus on growth.”
Flexibility Across Client Lifecycles
Russell Investments’ approach acknowledges that every firm has different strengths. Some want to preserve long-standing manager relationships. Others want to emphasize cost control, private market exposure, or tax efficiency. Meanwhile, clients’ needs aren’t static, and rigid portfolios often fail to adapt. Russell Investments’ custom model strategies are designed to evolve alongside client circumstances.
“We want to make sure that we’re implementing all the preferences that advisor would have, and the types of clients that they have, to make sure that we are flexible all along that client’s life cycle,” Espeseth explains. “And so, we want to make sure that we’re not forcing one model on a client, but the advisor is able to utilize that custom model strategy across their entire client base just depending on the preferences of that client.”
The framework accommodates diverse investment preferences, whether advisors want to incorporate public and private markets, emphasize low-cost strategies, or address specific client requirements. “So, depending on the client and their situation, the framework remains the same, but we’re then customizing a portfolio around those preferences and the needs of the client,” he adds.
The adaptability might prove particularly valuable as client circumstances change over time. Portfolio allocations can shift seamlessly from accumulation-focused strategies to retirement income generation without disrupting the overall strategy. “So, it really just allows you that flexibility as the financial advisor,” Espeseth says.
Technology as the Investment Engine
Espeseth sees technology as a critical driver of Russell Investments’ custom model strategies, powering the investment process while tech partners and service support complete the package to deliver end-to-end solutions.
“Russell Investments is the investment engine under the hood. We have technology partners, and then the ongoing service is the wrapper around all of that,” Espeseth explains. “So, from a growth perspective, that allows you to still have that customization, that flexibility for your clients, but not all that operational overhead to stunt your growth.”
Russell Investments integrates technology into every stage—from asset allocation and automated rebalancing to client reporting—so advisors don’t have to build or maintain that infrastructure themselves. The result: less time spent on mechanics; more time focused on clients.
Customized Service Models
Recognizing that advisor needs vary as much as client preferences, Russell Investments tailors its service delivery to match the advisor’s operational preferences. Some advisors prefer quarterly investment reviews and ongoing manager analysis, while others require different levels of portfolio oversight and rebalancing frequency.
Customization capabilities include the relationship management itself, aiming to ensure that Russell Investments’ support aligns with each advisor’s existing processes rather than imposing standardized service protocols. “We work in partnership with you all along the way to make sure that the custom model strategy that Russell Investments is providing you is exactly what you and your clients need,” Espeseth emphasizes.
Direct Indexing and Personalization
The rise of direct indexing has added new dimensions to personalization. Advisors increasingly want to offer clients the ability to align portfolios with tax situations, values, or exclusion preferences. Russell Investments’ Personalized Managed Accounts program provides directly indexed separately managed accounts, tax-loss harvesting, transition management, and values-based customization.
This direct indexing capability dovetails with the broader model strategy framework: offering efficiency and scale while retaining personalization. The goal is to enable advisors to create portfolios that feel bespoke to each client, without burdening the firm with additional operational complexity.
Customization and Scale, Without Compromise
Financial advisors are navigating a marketplace where personalization has become table stakes and scale has become survival. Russell Investments seeks to offer both by working with advisors to construct custom model strategies that preserve advisor autonomy while lifting operational burdens.
By positioning itself as “the investment engine under the hood,” backed by decades of experience and an open-architecture approach, Russell Investments aims to help RIAs and aggregators focus on what matters most: building client relationships and growing their businesses.
For advisors looking to balance differentiation with efficiency, Espeseth’s message is straightforward: partnership, not prescription.
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Additional Resources
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Important Information and Disclosures
Russell Investments is not affiliated with The Wealth Advisor.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets.
Model Strategies represent target allocations of the underlying funds; these models are not managed and cannot be invested in directly. Model Strategies are exposed to the specific risks of the funds directly proportionate to their fund allocation.
Personalized Managed Accounts (“PMA”) is a program of Russell Investment Management, LLC (RIM) and offers customized portfolio management services.
Each Personalized Separately Managed Account is a product of Russell Investment Management, LLC (“RIM”) and offered through RIM’s Personalized Managed Accounts (“PMA”) program. It represents a model portfolio provided by RIM. For active SMAs, it reflects a composite of third-party investment advisors selected by RIM. When the model is implemented, PMA is a separately managed account program of individually owned securities that can be tailored to meet investor’s investment objectives. RIM offers diversified, single or multi-asset managed accounts that can be customized to the investor’s investment objectives, circumstances and preferences, such as (but not limited to), market exposure, risk management, tax management, category and theme-based restrictions, and return objectives. Excluding any allocations to pooled investment vehicles, if any, each investor’s account is managed separately from other investor accounts, allowing for a personalized experience to deliver unique investment outcomes.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Russell Investments’ ownership is composed of a majority stake held by funds managed by TA Associates Management, L.P., with a significant minority stake held by funds managed by Reverence Capital Partners, L.P. Certain of Russell Investments’ employees and Hamilton Lane Advisors, LLC also hold minority, non-controlling, ownership stakes.
Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the “FTSE RUSSELL” brand.
First used: October 2025. RIM-04066.
