An increasingly complex economic backdrop highlights risks in certain asset classes, while unlocking opportunity in others. Bruce G. Picard, CFA, head of model portfolios, talks about growth, portfolio protection, and attractive asset classes in late 2021. The increasing awareness of the benefits that models can offer has led to an explosion in products available to financial professionals and their clients, but the proliferation of choice requires careful navigation.Read more
Reasons to consider model portfolios
Model portfolios can help take the hard work out of investing, offering a diversified range of asset classes and managers to help you help your clients meet their financial goals. But the benefits don’t end there. Here are three more ways in which financial professionals can benefit from using model portfolios.
1. To enrich client relationships. Models can enable financial professionals to spend more time with their current clients on holistic wealth and financial planning and less time on investment research, portfolio construction, rebalancing, trading, and fund rationalization.
2. To develop new business. Leveraging models may also lead to more efficient integration of new client relationships, as clients with similar risk profiles elect the same models, enabling financial professionals to spend more time converting prospects into clients.
3. To sharpen fiduciary oversight. Models enjoy the benefits of asset allocation and manager selection from an experienced third party with a robust process and a documented rationale for key investment decisions. They also enable financial professionals to leverage manager investment commentary and other materials.
Source: Broadridge, 2019.
Outsourced modelling can help drive business growth. In 2018, around 80% of financial professionals who completed training with a leading turnkey asset management program began to outsource their modelling. They went on to grow their AUM by 41% year over year. Those who didn’t outsource grew their AUM by only 18%.
Source: “When should you manage your own investment models? Maybe never.” Financial Planning, February 9, 2019.
Not all model portfolios are created equal. Scale, experience, and fee structures can vary widely across the industry.
Our model portfolios combine our key areas of expertise—asset allocation and manager research—into one flexible solution. For more than 25 years, our multi-asset solutions team has been at the forefront of portfolio design, successfully managing model portfolios using an open-architecture approach and introducing a wide array of new and alternative strategies. This is combined with robust manager research and oversight, which together help strengthen diversification benefits across our portfolios.
All data is as of 12/31/19 unless otherwise stated.
1. “Opportunities in Target Date Funds,” Ignites Retirement Research (IRR), March 2016. The #1 ranking is based on the IRR survey of 225 DC plan financial professional.
Our model portfolios
Investors in our range of model portfolios benefit from deep diversification, with our open-architecture structure allowing us to incorporate the leading investment talent from anywhere in the world. In fact, we ranked #1 by top DC plan financial professionals for open architecture.³
3. All data is as of 12/31/19 unless otherwise stated. “Opportunities in Target Date Funds,” Ignites Retirement Research (IRR), March 2016. The #1 ranking is based on the IRR survey of 225 DC plan financial professional.
Our full range of capabilities
Our three model portfolio suites
Click on the links below to find out more about our range of model portfolios.
Active allocations to global equities and U.S. sectors
Cost-efficient implementation of active mutual fund and passive ETF strategies
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Financial professionals: Learn more about reasons to consider model portfolios, key factors to consider when evaluating providers and our approach.
Investors: Ask your financial professional how model portfolios can help you achieve your long-term investing goals.
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