As their business portfolios face more diverse competition, a majority of financial advisors are relying heavily on model portfolios for business growth, prospecting and client retention, according to a survey released by Broadridge Financial Solutions Inc.

The survey, which included 500 financial advisors, shows that 85 percent use model portfolios, with 70 percent combining models with custom portfolio design. Further, respondents report that more than half of their advised assets (54 percent) are in model portfolios.

Sixty-five percent of the advisors using model portfolio said business scalability is the main driver; 35 percent of advisors not using them said the same. Other top reasons include leveraging investment management (50 percent), focusing efforts on building clients and retention (47 percent) and better addressing regulation (36 percent).

More than three-quarters of advisors (78 percent) believe that their clients care more about planning, service and support than outperforming the market, and 83 percent agree that model portfolios are essential to allowing more time for financial planning.

A majority of the respondents believe that model portfolios are more appropriate for smaller portfolios, with 73 percent viewing them as the preferred approach for client portfolios under $500,000. Meanwhile, 46 percent prefer models for portfolios under $1 million and 31 percent prefer models for portfolios over $1 million.

In a prepared statement, Matthew Schiffman, principal at Broadridge, said the shifting of assets to model portfolios suggests that financial advisors are acknowledging that they aren't just being asked to provide investment management expertise and that they need to prioritize holistic financial planning and client service.

“A focus solely on investment management limits the growth of an advisor's book of business," he said. "As advisors find the right balance between custom and model portfolios for their practice, we foresee more assets flowing into models, particularly if usage expands among higher AUM accounts."

However, not all advisors are on board with using model portfolios for their clients. Fifteen percent said they are not use model portfolios to any degree. Of that group, 69 percent said they will definitely, or probably, not begin to use models in the next two years.