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Financial advisors aim to grow their practices and serve more clients, but it can be challenging to do so without sacrificing quality. Thankfully, model portfolios offer a path forward.
Think of model portfolios as investment blueprints that advisors can customize to the needs of each client. They use them to scale their practice, streamline asset allocation, support clients’ investment goals, and improve distribution strategies — all while boosting profitability and simplifying the investment process.
Here’s everything you need to know about the benefits of model portfolios for advisors, from key statistics to how to use them to balance scale and customization.
Creating a portfolio from scratch can feel overwhelming. Let’s look at how model portfolios offer a solution to this otherwise complex, intimidating process.
Model portfolios give financial advisors and financial services professionals a ready-made investment strategy that can be deployed to meet their clients’ goals.
Typically, model portfolios include an array of investment products. These can include stocks, bonds, ETFs, index funds, mutual funds, real estate, and more. The diversification helps spread and minimize risk so investors can more easily meet their individual goals.
Model portfolios have many benefits for advisors and their clients, including:
Putting together a balanced portfolio that meets investor needs requires a lot of overhead work. There are many factors to consider, but a good model portfolio has done that work in advance and created a turn-key solution for financial services professionals.
Rather than researching and vetting dozens of individual funds or securities across different markets, advisors can offer clients a curated mix of investments that work together as a complete portfolio. This would take considerable time to assemble independently, but model portfolios deliver it as a ready-made package.
Portfolios often require fine-tuning and adjustment. But most model portfolios come with built-in professional oversight, meaning investment teams monitor market conditions and make adjustments when needed.
When rebalancing is required, it happens systematically across all clients using that model, rather than requiring individual advisor attention for each account. This removes the burden of constantly tracking portfolio drift, timing rebalancing decisions, and executing trades.
Model portfolios eliminate most of the heavy lifting of building a portfolio because the most critical work is already done for you. Instead of spending hours determining investment objectives, researching asset allocations, and stock picking, bond picking, and mixing in the right ETFs or mutual funds, you start with a professionally constructed framework.
The portfolio structure, asset mix, and security selection have been handled by investment teams with institutional resources. You simply choose the model that aligns with your client’s risk tolerance and goals, then customize as needed. This means you can move from client consultation to implementation in a fraction of the time it would take to build everything from scratch.
Because model portfolios err on the side of increased diversification, they minimize investment risk. A spread of assets, vehicles, and investment types means a collapse at any one corner of the market is unlikely to upend the investment.
This also gives advisors a defensible approach when the market is volatile. Rather than second-guessing individual choices, they can point to the systematic risk management and stress testing that went into the model’s construction — institutional-level analysis that most advisors lack the resources to conduct on their own.
Because they are typically time tested and widely used, model portfolio performance is easier to track than a bespoke portfolio.
Standardized models come with benchmarks and readily available performance data, eliminating the need for custom analysis tools or expensive third-party tracking services. Advisors can compare results against industry standards and explain performance drivers to clients without spending hours creating custom reports.
Arguably the biggest draw for model portfolios is how they effectively balance scale and customization. Because they are designed to meet the needs of a large group of investors, model portfolios are an easy way to scale up a financial advisor’s practice.
Here are the benefits that financial advisors can expect when using model portfolios to balance scale and customize investment strategies for their clients.
Model portfolios automate the time-consuming work that typically bogs down advisors. Instead of manually tracking when portfolios drift out of balance or spending hours executing rebalancing trades across dozens of client accounts, the system handles these tasks automatically.
Real-time updates mean advisors always have current information. When markets shift or adjustments are needed, the changes happen systematically across all relevant accounts. Advisors can serve more clients with less hands-on portfolio management, allowing their practice to grow without burning out.
Asset managers and advisors can lean on index partners such as VettaFi to help build model portfolios that can deliver customized investment strategies.
Model portfolios offer advisors flexibility, allowing them to adapt rather than stick to a rigid, one-size-fits-all approach. The customization options are extensive. Investment advisors can target allocations and incorporate or exclude certain sectors, emphasize income-generating investment strategies for retirees, or tailor client portfolios to meet specific client goals.
Clients feel heard and understood when their values and goals are reflected in their long-term investments, leading to higher satisfaction and retention. Satisfied clients make referrals, helping advisors grow their practices. The ability to offer both professional-grade portfolio construction and customization gives advisors a competitive edge.
One of the chief benefits of model portfolios as an investment solution for investors is that they are easy to understand. They often clearly articulate what the investment goal is and the path that is being taken to meet that investment goal. This means advisors will be spending less of their time having to convince or explain to a client why they are making the investment decision they are.
Additionally, they eliminate the need to make a portfolio from scratch. Creating a portfolio is a complex task, and model portfolios eliminate a majority of that work.
Outsourcing model portfolios and portfolio construction reduces operational costs compared to managing individual investments in-house. The time, energy, and brain power that is spent on day-to-day management can instead be spent on unlocking other discoveries and prioritizing other objectives. This is good for the financial advisor and the client.
Model portfolios can incorporate any investment strategy a client needs: index funds, active funds, ETFs, mutual funds, stocks, bonds, and more. They save on costs because they allow advisors to outsource daily account and investment management, so they can devote their time to developing their practice and building better client relationships.
Investors ultimately want to protect and grow their principal investments. Model portfolios are designed to balance potential returns within each client’s risk tolerance, helping protect their principal while still creating opportunities for growth.
They allow advisors to leverage the expertise and talents of professionals who are adept at handling rebalancing based on current market conditions. Additionally, they are built for diversity of investments in multiple asset classes. This is essential in terms of protecting investments against market fluctuations, volatility, and macroeconomic surprises.
According to Morningstar, investment professionals and advisory services are growing in popularity. As of March 31, 2025, model portfolios accounted for $626 billion in assets under advisement. This includes $38 billion in flows, which is a 62% increase since Morningstar’s 2023 report, which reported $23 billion in flows.
Blackrock is a big driver here. They remained the largest third-party model portfolio provider with $168 billion in assets under management.
This kind of growth is important to keep in mind, especially given the recent surge in actively managed stock and bond ETFs in the last few years. Model portfolios are likely to begin incorporating that trend going forward. 44% of models reported at least one actively managed ETF in their holdings.
Active ETFs offer some critical advantages in uncertain market environments, and tend to have lower expense ratios than mutual funds, along with the superior tax efficiency that comes as part and parcel of the ETF wrapper.
If you’ve been seeking a customized model portfolio, partnering with an index provider and partner like VettaFi could give you a serious advantage. Index providers have access to data and the ability to backtest.
"Custom indexing implements a unique investment process or thesis, the same way an active manager does, but in a systematic way that allows for a backtest, yet is not dependent on a star manager,” said VettaFi Head of Index Product, Dalton Eastwood, CFA. “VettaFi has been building custom indexes for clients for over 10+ years. Most Advisors are not yet aware they could have a custom index built specific to their clients needs."
Reach out to our team now to learn more about customized indexes, data, and benchmarking support for your model portfolio.
Financial advisors aim to grow their practices and serve more clients, but it can be challenging to do so without sacrificing quality. Thankfully, model portfolios offer a path forward.
Think of model portfolios as investment blueprints that advisors can customize to the needs of each client. They use them to scale their practice, streamline asset allocation, support clients’ investment goals, and improve distribution strategies — all while boosting profitability and simplifying the investment process.
Here’s everything you need to know about the benefits of model portfolios for advisors, from key statistics to how to use them to balance scale and customization.
Creating a portfolio from scratch can feel overwhelming. Let’s look at how model portfolios offer a solution to this otherwise complex, intimidating process.
Model portfolios give financial advisors and financial services professionals a ready-made investment strategy that can be deployed to meet their clients’ goals.
Typically, model portfolios include an array of investment products. These can include stocks, bonds, ETFs, index funds, mutual funds, real estate, and more. The diversification helps spread and minimize risk so investors can more easily meet their individual goals.
Model portfolios have many benefits for advisors and their clients, including:
Putting together a balanced portfolio that meets investor needs requires a lot of overhead work. There are many factors to consider, but a good model portfolio has done that work in advance and created a turn-key solution for financial services professionals.
Rather than researching and vetting dozens of individual funds or securities across different markets, advisors can offer clients a curated mix of investments that work together as a complete portfolio. This would take considerable time to assemble independently, but model portfolios deliver it as a ready-made package.
Portfolios often require fine-tuning and adjustment. But most model portfolios come with built-in professional oversight, meaning investment teams monitor market conditions and make adjustments when needed.
When rebalancing is required, it happens systematically across all clients using that model, rather than requiring individual advisor attention for each account. This removes the burden of constantly tracking portfolio drift, timing rebalancing decisions, and executing trades.
Model portfolios eliminate most of the heavy lifting of building a portfolio because the most critical work is already done for you. Instead of spending hours determining investment objectives, researching asset allocations, and stock picking, bond picking, and mixing in the right ETFs or mutual funds, you start with a professionally constructed framework.
The portfolio structure, asset mix, and security selection have been handled by investment teams with institutional resources. You simply choose the model that aligns with your client’s risk tolerance and goals, then customize as needed. This means you can move from client consultation to implementation in a fraction of the time it would take to build everything from scratch.
Because model portfolios err on the side of increased diversification, they minimize investment risk. A spread of assets, vehicles, and investment types means a collapse at any one corner of the market is unlikely to upend the investment.
This also gives advisors a defensible approach when the market is volatile. Rather than second-guessing individual choices, they can point to the systematic risk management and stress testing that went into the model’s construction — institutional-level analysis that most advisors lack the resources to conduct on their own.
Because they are typically time tested and widely used, model portfolio performance is easier to track than a bespoke portfolio.
Standardized models come with benchmarks and readily available performance data, eliminating the need for custom analysis tools or expensive third-party tracking services. Advisors can compare results against industry standards and explain performance drivers to clients without spending hours creating custom reports.
Arguably the biggest draw for model portfolios is how they effectively balance scale and customization. Because they are designed to meet the needs of a large group of investors, model portfolios are an easy way to scale up a financial advisor’s practice.
Here are the benefits that financial advisors can expect when using model portfolios to balance scale and customize investment strategies for their clients.
Model portfolios automate the time-consuming work that typically bogs down advisors. Instead of manually tracking when portfolios drift out of balance or spending hours executing rebalancing trades across dozens of client accounts, the system handles these tasks automatically.
Real-time updates mean advisors always have current information. When markets shift or adjustments are needed, the changes happen systematically across all relevant accounts. Advisors can serve more clients with less hands-on portfolio management, allowing their practice to grow without burning out.
Asset managers and advisors can lean on index partners such as VettaFi to help build model portfolios that can deliver customized investment strategies.
Model portfolios offer advisors flexibility, allowing them to adapt rather than stick to a rigid, one-size-fits-all approach. The customization options are extensive. Investment advisors can target allocations and incorporate or exclude certain sectors, emphasize income-generating investment strategies for retirees, or tailor client portfolios to meet specific client goals.
Clients feel heard and understood when their values and goals are reflected in their long-term investments, leading to higher satisfaction and retention. Satisfied clients make referrals, helping advisors grow their practices. The ability to offer both professional-grade portfolio construction and customization gives advisors a competitive edge.
One of the chief benefits of model portfolios as an investment solution for investors is that they are easy to understand. They often clearly articulate what the investment goal is and the path that is being taken to meet that investment goal. This means advisors will be spending less of their time having to convince or explain to a client why they are making the investment decision they are.
Additionally, they eliminate the need to make a portfolio from scratch. Creating a portfolio is a complex task, and model portfolios eliminate a majority of that work.
Outsourcing model portfolios and portfolio construction reduces operational costs compared to managing individual investments in-house. The time, energy, and brain power that is spent on day-to-day management can instead be spent on unlocking other discoveries and prioritizing other objectives. This is good for the financial advisor and the client.
Model portfolios can incorporate any investment strategy a client needs: index funds, active funds, ETFs, mutual funds, stocks, bonds, and more. They save on costs because they allow advisors to outsource daily account and investment management, so they can devote their time to developing their practice and building better client relationships.
Investors ultimately want to protect and grow their principal investments. Model portfolios are designed to balance potential returns within each client’s risk tolerance, helping protect their principal while still creating opportunities for growth.
They allow advisors to leverage the expertise and talents of professionals who are adept at handling rebalancing based on current market conditions. Additionally, they are built for diversity of investments in multiple asset classes. This is essential in terms of protecting investments against market fluctuations, volatility, and macroeconomic surprises.
According to Morningstar, investment professionals and advisory services are growing in popularity. As of March 31, 2025, model portfolios accounted for $626 billion in assets under advisement. This includes $38 billion in flows, which is a 62% increase since Morningstar’s 2023 report, which reported $23 billion in flows.
Blackrock is a big driver here. They remained the largest third-party model portfolio provider with $168 billion in assets under management.
This kind of growth is important to keep in mind, especially given the recent surge in actively managed stock and bond ETFs in the last few years. Model portfolios are likely to begin incorporating that trend going forward. 44% of models reported at least one actively managed ETF in their holdings.
Active ETFs offer some critical advantages in uncertain market environments, and tend to have lower expense ratios than mutual funds, along with the superior tax efficiency that comes as part and parcel of the ETF wrapper.
If you’ve been seeking a customized model portfolio, partnering with an index provider and partner like VettaFi could give you a serious advantage. Index providers have access to data and the ability to backtest.
"Custom indexing implements a unique investment process or thesis, the same way an active manager does, but in a systematic way that allows for a backtest, yet is not dependent on a star manager,” said VettaFi Head of Index Product, Dalton Eastwood, CFA. “VettaFi has been building custom indexes for clients for over 10+ years. Most Advisors are not yet aware they could have a custom index built specific to their clients needs."
Reach out to our team now to learn more about customized indexes, data, and benchmarking support for your model portfolio.
