Displaying items by tag: model portfolios

Advisors are constantly looking for the latest tools that can help them manage their practice more efficiently without giving up returns in exchange. With the rapid developments in model portfolios, the technology is finally there to deliver the aforementioned goals in a timely manner. 


Utilizing these models helps advisors draw on institutional expertise while still customizing to address each client's unique needs, ensuring a consistent experience for all clients. This strategy combines the benefits of professional research with the advisor’s ability to manage and optimize portfolios, facilitating both improved performance and efficient firm scaling. 


By employing technology for asset research and replacement, advisors can integrate customization, allowing them to dedicate more time to client relationships and business growth.

Finsum: This efficiency gained by streamlining portfolio construction allows advisors to improve their relationships with clients. 

Published in Wealth Management
Saturday, 11 May 2024 08:02

Alts Models to the Masses

Monday heralded the unveiling of a new investment suite by the firm, iCapital Model Portfolios, aimed at elevating advisors' asset-allocation strategies to a new echelon of diversification. 


Lawrence Calcano, iCapital's Chairman and CEO, voiced enthusiasm about the debut, highlighting its innovation in integrating alternative investments into client portfolios. Among the offerings stands the iCapital Multi-Asset Portfolio (iMAP), strategically engineered to blend income and growth through a selection of top-tier private equity, private credit, and real asset funds. 


These portfolios, actively curated by iCapital's research team, aim to deliver total returns with diminished volatility compared to traditional assets, assuaging client concerns during market fluctuations. With aspirations to broaden the lineup and accessibility to over 100,000 financial advisors, iCapital aims to perpetuate the simplification and enrichment of the investment experience for advisors and clients alike.

Finsum: Model that can capture uncorrelated returns a necessary niche in the evolving landscape.

Published in Wealth Management

In the daily rush of managing your practice, finding ample time to focus on client relationships and business growth can be a challenge. According to Cerulli Advisor Metrics, advisors globally spend just 55.3% of their time on client-facing tasks, with the remainder consumed by administrative duties, investment management, and professional development. Some advisors opt to delegate investment management responsibilities to third-party firms, allowing them to devote more attention to client engagement and asset growth.


Introducing managed portfolios into your practice can yield several benefits, starting with addressing capacity constraints. With each client possessing unique goals and risk tolerances, crafting individualized plans and managing portfolios can be time-consuming. While some practices employ in-house specialists or investment teams, scaling these resources may prove costly and logistically challenging.


By recommending third-party discretionary portfolio management, advisors can access experienced professionals without bearing the burden of direct development expenses. This approach not only offers clients access to seasoned investment professionals but also frees up advisors' time for more client interaction and personalized service. Ultimately, leveraging professional portfolio management services can enhance efficiency, scalability, and client satisfaction within your practice.

Finsum: Its important to realize the that your expertise could be best served by being in the middle of a client and the portfolio construction leveraging technology to your advantage. 

Published in Wealth Management

Goldman Sachs Asset Management (GSAM) is aiming to become one of the top 5 providers of model portfolios. Currently, GSAM is the ninth largest in terms of asset managers, with model portfolio assets of $14.5 billion. Over the next decade, model portfolios are projected to have more than $11 trillion in assets in total.

According to Alexandra Wilson-Elizondo, the co-CIO of GSAM’s multi-asset solutions group, the firm’s strategy is to outgrow its competitors rather than take existing market share as model portfolio assets are projected to grow 20% annually. Model portfolios consist of off-the-shelf strategies and custom models. Demand for the latter has been robust among wealthy clients.

Increasing adoption by financial advisors is the primary growth driver for the category. By decreasing time and resources spent on investment management, advisors can add more value in areas like client service, tax planning, and estate management. 

Currently, the leading provider of model portfolios among asset managers is Blackrock, followed by Wilshire Associates, Capital Group, and Vanguard. In 2019, GSAM bought S&P Global Market Intelligence, and it acquired NextCapital Group in 2022 to build the foundations of its model portfolio business.

Finsum: Goldman Sachs is aiming to grow its model portfolio segment and become a top-five provider among asset managers. Forecasts are for the category to grow 20% annually and exceed $11 trillion by 2030. 

Published in Wealth Management
Tuesday, 12 March 2024 04:08

The Clients that Need Model Portfolios

Managing investments can be overwhelming for advisors amidst their busy schedules, but model portfolios offer efficiency, diversification, and transparency, allowing advisors to focus more on their clients. Advisors have the option to create their own portfolios or use third-party models, with the former being more popular as it allows them to tailor investments while maintaining efficiency. 


The primary benefit of model portfolios is the quick and efficient implementation of advisors' best ideas, essential for business growth. While clients benefit from the advisors' expertise, there may be instances where they desire investments outside the model, requiring advisors to balance client preferences with their investment strategies. 


Overall, model portfolios streamline investment management, enabling advisors to concentrate on building strong client relationships and providing personalized financial guidance.

Finsum: Models not only meet the clients’ needs but they give more opportunities to develop a relationship with clients to better understand financial concerns. 

Published in Bonds: Total Market
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