Leveraging Tech to Customize Model Portfolios

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When used effectively, model portfolios enable financial advisors to streamline and standardize the portfolio management process without sacrificing performance. Advisors can still deliver and manage a tailored portfolio based on a client’s specific goals without spending excess time and resources starting the portfolio construction process from scratch.

With the right tech in place, advisors can access reliable, high-quality models that can be used repeatedly across their book of business. Considering the key to scaling a firm is standardizing practices (without sacrificing quality), ensuring an equitable experience for all clients is key.

Those who implement model portfolios into their practice can take full advantage of the robust institutional resources that go into developing these third-party portfolios. Keeping that in mind, clients are best served when the advisor maintains the ability to customize model portfolios to address each client’s unique needs.

Break Out of the One-Size-Fits-All Box

Model portfolios are built by skilled, third-party financial professionals with extensive institutional resources at their disposal. When incorporated into your portfolio management process, they can save you valuable time while helping to provide a standardized experience for your clients.

There are often cases, however, where a model portfolio doesn’t quite meet your client’s needs right out of the box. For that reason, many advisors prefer to have the ability to customize their model portfolios.

The ability to customize model portfolios creates a happy medium for advisors -- they can leverage the research and expert guidance of highly skilled money managers while still maintaining control over what’s included in their clients’ portfolios. This ability to optimize, without building from the ground up, gives advisors a leg up on achieving the best performance for their clients while effectively scaling their firm.

With an understanding of why having opportunities to customize is important, the question becomes how advisors can most effectively compare pieces of their models, research suitable replacements, and ultimately screen for the best-performing assets available.