Model portfolios continue to gain ground with financial advisors, who can select from a growing number of models to help manage their clients' investments.
Almost $350 billion in assets sat in model portfolios as of March 2022, a 22% increase over the prior nine months, Morningstar reported in June. The research firm's database covered more than 2,500 models as of November 2022, more than double the amount two years earlier.
ThinkAdvisor recently asked advisors to tell us how model portfolios fit, or don't fit, into their businesses. We asked:
- How and why do you use model portfolios in your business?
- Do you employ one family/one product group/one series with different asset allocations? Or a wide variety of them?
- What are the pros and cons of model portfolio use?
Clearly, there's no one answer or approach that covers all practitioners. Here's what five advisors told us about their work with (or without) model portfolios.
(Image at top: Shutterstock)
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