Take the lead: Employing investment models

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Advisors: Models can help you meet expectations for customization and performance and can be flexibly implemented as part of a solution or as a holistic investment plan.

The background

Investors are increasingly looking to their advisors to offer a wide range of services that address their unique situations. At the same time, advisors are facing the added pressure of navigating a complex regulatory landscape and an ever-evolving capital markets environment. Given this challenging backdrop, many advisors are turning to model portfolios created by investment managers to help their clients meet their financial goals — models that align with their thinking and pursue the focused outcomes their clients demand.

How investors can approach using model portfolios to pursue their goals

  • Think about how you want your advisor to spend their time.

Model portfolios can give advisors more time to have meaningful discussions with their clients and plan for the future. More and more, the value that an advisor provides is not only found in picking investments, but also in their ability to provide a tailored financial plan centered on a client’s goals.

  • Ask about the ways that models can be implemented.

Models can be components of a customized plan, filling a unique need for things like income or inflation targeting, or they can be a holistic solution. Advisors can help determine the best implementation model and flexibly adapt based on specific goals. Smaller investors may be among the largest beneficiaries of models because they can gain access to high-quality investment and risk management that would otherwise be unavailable or unaffordable.

  • Leverage the diverse universe of model portfolios.

Models now account for more than $1 trillion in assets under management, and there are more than 10,000 model choices — exceeding the number of individual mutual funds currently offered. By virtue of their number, models now address a wide variety of outcomes to help investors reach their goals. Technology has also made models easier to build, implement and report on.