As interest in model portfolios continues to grow among financial professionals, you may be considering integrating these valuable tools into your practice. You may already know that there are a variety of model types available for your consideration, and there are also different ways you can access them. In this article we’ll explore a couple of the specific types of models, as well as your options for accessing them so you can begin leveraging these powerful tools today.
Once you decide to integrate model portfolios into your advising practice, what’s your next step? That will depend greatly on two important factors. The first involves understanding the types of model portfolios you can utilize and how they differ. The second is analyzing the key objectives of each type and how those objectives impact portfolio development: taxable versus tax aware; strategic or tactical. Let’s begin by taking a closer look at these objectives and how they can affect which type of model portfolio you decide to implement.
Among financial professionals, model portfolios have become all the rage of late – and with good reason. These versatile, time-saving tools are helping them serve more clients more efficiently, maintain consistency in investment strategies across their client bases, and protect clients from overexposure to any particular investment or asset class.
What financial professional hasn’t experienced at least some level of client dissatisfaction? You’ve probably gotten an earful from yours on more than a few occasions. Maybe they expect unrealistically high performance regardless of market conditions. Or want the instant gratification of immediate returns, though returns are often a more distant gratification kind of experience. Perhaps they think you have the power to see into the future and predict market movements even in the face of geopolitical instability and general financial upheaval.
Increasingly, financial advisors are finding themselves facing more complexity in serving their clients and less time to accommodate their needs. So, it isn’t surprising that outsourcing is growing in popularity as a portfolio planning resource. But what exactly is outsourcing? How are advisors integrating Model Investment Strategies into their practice? And how can it positively impact the quality of service advisors are able to provide?
Suddenly, model portfolios are generating headlines and conversation industry-wide. Why the growing interest and what does it mean for advisors looking to improve how they serve their clients? Understanding how model portfolios can be integrated into the services advisors provide has important implications for distribution strategies and profitability. What’s driving the trend? How is the industry responding? And what does the future hold for advisors using this tool?