Displaying items by tag: models

Model portfolios have transformed from basic investment templates into versatile, sophisticated tools that support a wide range of advisor and client needs. Today, assets in model portfolios are projected to grow to $11 trillion by 2028, fueled by the rising demand for customization and outcome-oriented investment strategies. 

The most common models remain asset allocation portfolios, especially those built with open architecture, which allows advisors to incorporate both in-house and third-party managers for added diversification and cost efficiency. 

Alongside these, outcome-oriented models—such as those focused on income generation, downside protection, or tax optimization—are gaining popularity for their ability to align with specific client goals. Building block models, which emphasize a particular asset class or investment objective, also offer advisors greater control in tailoring portfolios around their core expertise. 

Finsum: As the model portfolio landscape matures, advisors are increasingly choosing providers that offer a full spectrum of solutions to enhance both operational efficiency and client personalization.

Francois Rochon once observed that true investing success comes not from avoiding market volatility but from using it to one’s advantage—a mindset that resonates deeply today. 

Markets, by nature, swing between extremes, and the recent months have been no exception, testing the patience of even seasoned investors. Rather than reacting emotionally to these shifts, investors are increasingly turning to structured approaches that bring consistency to decision-making. 

One such approach is factor-based investing, which allocates capital based on specific attributes like profitability, low volatility, or long-term momentum. This strategy reduces reliance on market timing and instead builds portfolios grounded in time-tested characteristics. 

Finsum: In uncertain environments, such disciplined frameworks can offer clarity and help investors stay focused on enduring outcomes rather than short-term noise.

Model portfolios serve as pre-designed recipes for building portfolios, offering advisors a time-saving way to manage investments while focusing on financial planning and client relationships. They are often composed of mutual funds and ETFs, with a growing preference for active ETFs due to their cost-efficiency and flexibility. 

Popular providers include BlackRock, Vanguard, and American Funds, offering core allocations like 60/40, income-focused, and all-equity models. These portfolios appeal to advisors for their scalability and customization options, such as incorporating funds from multiple asset managers to diversify perspectives. 

While they are typically low-cost and tax-optimized, a drawback is their relative lack of transparency compared to mutual funds or ETFs. Investors should ask their advisors about the track record, due diligence, and success metrics of any model portfolio being recommended.

Finsum: We love the use of model portfolios to create customized and thematic strategies for tailored solutions to clients problems. 

Goldman Sachs Asset Management has partnered with GeoWealth to deliver customizable, open-architecture investment models for registered investment advisors (RIAs). These models, accessible through GeoWealth’s unified managed accounts (UMA) platform, include SMAs, ETFs, direct indexing, mutual funds, and alternatives, allowing RIAs to tailor them to clients’ unique goals and tax considerations. 

Starting with mutual fund and ETF models, Goldman plans to expand offerings to include equity SMAs, fixed-income solutions, and direct indexing in the coming months. Responding to demand from RIAs for scalable, personalized portfolio solutions, the partnership aims to streamline account management, simplify paperwork, and boost operational efficiency. 

Goldman’s multi-asset solutions team will power these custom models, leveraging the firm’s capabilities with API integrations across 42 tech vendors. 

Finsum: These solutions can increase flexibility greatly for RIAs and provide a streamlined process for clientele. 

CAIS, a leading alternative investment platform for independent financial advisors, has launched CAIS Advisors, a registered investment advisor aimed at improving portfolio construction tools. Headed by Chief Investment Officer Neil Blundell, CAIS Advisors plans to offer advisory services and customizable alternative investment portfolios.

Blundell highlighted the challenges advisors face when integrating alternative investments into broader portfolios and emphasized how CAIS technology simplifies this process. The new division will also introduce multi-manager registered solutions, spanning private equity, real assets, and hedge funds.

 Additionally, CAIS will debut Compass, a tool designed to streamline portfolio construction using alternative investments. These launches were unveiled at the CAIS Alternative Investment Summit.

Finsum: Model portfolios and construction tools can greatly improve advisor effectiveness and efficiency.