“We used to be fully active,” says Jason Romano, a partner at Moss Adams Wealth Advisors in Los Angeles, referring to his firm’s approach to selecting asset managers. A committee at Moss Adams reviewed manager performance in various asset classes and selected portfolios.

But, Romano notes, frequent changes of portfolio managers irritated both the firm’s advisors and their clients. About six years ago, the firm began using passive strategies for about two-thirds of the equity portion of client portfolios. The result, says Romano, was lower fees and better performance. “You can’t argue with the numbers,” he says.

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