Key Highlights
- Apple’s transition from the iPod with the iPhone shows illustrates why advisory firms must modernize successful operating models before market dynamics force them to.
- Managed accounts can allow advisors to preserve their investment philosophy while scaling portfolio management and freeing capacity for higher-value client and business growth activities.
- With managed account assets reaching $13.7 trillion in 20241, the shift toward scalable, personalized investment solutions is already underway—not a trend advisors can afford to ignore.
“If you don’t cannibalize yourself, someone else will.”
Steve Jobs
This quote has become one of the defining lessons of innovation, and few examples illustrate it better than Apple’s decision to launch the iPhone. At the time, that decision threatened one of the most successful products in the company’s history: the iPod.2
Some of the most important decisions require leaders to look at something that has served them well, something that helped build their success, and ask a difficult question: should we keep protecting what works today, or build what will matter tomorrow?
Apple’s willingness to disrupt itself
In 2006, the iPod was a juggernaut. Various analyses estimate that it accounted for roughly 40% of Apple’s revenue and had become the product most closely associated with the company.3
Yet, Apple understood that mobile devices would eventually absorb the functionality of standalone music players. If Apple refused to build that future, someone else would.4,5 Rather than protect its most successful product, it chose to build the future itself.
The parallel facing advisors
Today, many advisors face a remarkably similar moment. For years, the advisor-as-portfolio-manager (APM) model helped firms build trust through portfolio construction, research, trading, and ongoing management. It worked. It still does. But advisors now face a question similar to the one Apple confronted with the iPod: Should they continue protecting the operating model that helped build their business, or evolve it before growth demands something different?
According to Cerulli Associates, managed account assets reached $13.7 trillion in 2024, growing nearly 20% year-over-year, with total net flows into managed account programs projected to reach $811.8 billion, the second-highest level ever recorded.6,7
As practices grow, advisors often spend increasing amounts of time managing portfolios, trading, drift management, account-level customization, tax considerations, and operational oversight. Those activities are important, but they can limit the capacity available for higher-value clients and business growth activities.
Your value is in your philosophy, not your delivery
One reason some advisors hesitate to adopt a managed account approach is the fear of losing control. Apple faced a similar challenge internally. The iPod had become synonymous with the company's success. Letting go of that model felt risky. Yet the company recognized that preserving the underlying customer value mattered more than preserving the old delivery mechanism.8,9
The same principle applies to advisory businesses. The decision to move toward managed accounts mirrors Apple's transition from the iPod to the iPhone. The goal was not to abandon what made the company successful. It was to preserve that value in a model built for the future.
Managed account platforms allow advisors to maintain strategic oversight and investment direction while leveraging scalable infrastructure for implementation, monitoring, trading, personalization, and portfolio maintenance.
In other words: Keep the philosophy. Modernize the delivery.
From capacity to growth
A real opportunity in moving from APM to a managed approach lies not just in operational efficiency, but in what that efficiency can make possible.
When trading, monitoring, implementation, and portfolio administration become more scalable, advisors can reinvest their time into activities that can grow the value of their business:
- Deepening client relationships & share of wallet
- Serving more clients without sacrificing service quality
- Expanding planning services
- Growing referral networks
- Developing the next generation of advisors within the practice
Much like Apple used the iPhone to unlock entirely new growth opportunities, advisors can use managed account capabilities to create capacity that fuels future expansion and helps to ensure that success can scale.
Some of the most successful advisors of the next decade will likely be those who recognize that modernization is not about replacing their expertise; it’s about extending it. As Steve Jobs recognized, the biggest risk is not changing a successful model. It's waiting until the market changes it for you.
That is the question facing advisors today. Not whether the APM model works, but whether it remains the best platform for the next stage of growth.
Explore how managed account solutions can help advisors modernize portfolio management and create capacity for growth.
