Nearly three-fourths of financial advisors offer their clients model portfolios, while more than 25% aren’t ready to give up complete control over their investment choices, Morningstar found in a recent survey.
“That’s why a growing cohort of advisors is starting to work with asset managers to use their model portfolios as a starting point for customization,” Stephen Margaria, a Morningstar manager research analyst, wrote recently on the research firm’s website.
“This provides a middle ground between fully bespoke investment management and off-the-shelf solutions, allowing advisors to make targeted adjustments while still leveraging the structure of established models,” he said.
Advisors can find prebuilt model portfolios through model marketplaces or broker-dealers, but these offerings don’t always meet clients’ specific goals, Margaria noted, offering tips on customizing the portfolio allocations.
ThinkAdvisor asked advisors to share whether and how they customize model portfolios for clients, how they choose which models to use and how using model portfolios has affected their practice. We also asked whether they use these portfolios for all clients.
Check out the gallery for their responses, which are edited for length and clarity.
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