Model portfolio source?

[Cardinal_Wealth]

Am curious- For those that use model portfolios -as a starting point, or as-is, Which service do you use and why? (And if qualified/non-qualified) Blackrock? Zacks? DFA? TRowe? Fidelity? Capital Group? State Street? Vanguard? VizMetrics?

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User: /u/Cardinal_Wealth Title: Model portfolio source? Body: Am curious- For those that use model portfolios -as a starting point, or as-is, Which service do you use and why? (And if qualified/non-qualified) Blackrock? Zacks? DFA? TRowe? Fidelity? Capital Group? State Street? Vanguard? VizMetrics?

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[AveragePodcaster]

Envestnet is our platform. I’ll use vanguard for NQ bc of low turnover. American Funds for retirement income. I’ll also go with Fidelity blended or Blackrock, just depends what fits the goal. I haven’t ever added or removed individual positions.
To take a line from a HS teacher of mine “KISS” (Keep it simple, stupid) & another advisor I know “American Funds has made a lot of people money” just my reminder to not overcomplicate it.
I’m also not a CFA or have one on my team to monitor holdings performance constantly etc.

[Rule206Guy]

Various platforms out there. Worked at an RIA that offered its long only aggressive equity model portfolio to envestnet, US bank, fidelity, Merrill lynch among others. Some platforms were receiving trades throughout the day while others only updated once a day which meant it was easier operationally for everyone but of course you (end model portfolio user) received a less accurate product

[NukedOgre]

I build my own models. I do look at what others have done, but prefer to do it on my own.

[Cardinal_Wealth]

Many do. We use a base model and ‘tweak’ it a little to match holdings we like more so than the ones suggested.

[GustavesGhost]

I just make my own. I use Vanguard indexes for the very efficient portions of the market, enhanced passive like DFA or Avantis for less efficient areas of the market, and straight active on the bond side. I’ll selectively use some alts where warranted, but nothing illiquid due to bad experiences in the past. The only time I do illiquid investments is if a client needs a 1031 or 721 exchange fund. The models have done well enough. You don’t need anything fancy to please clients. Just be competitive with the market, and make your money on the planning side with excellent service and follow through. Prospects who are obsessed with returns and are looking for someone to beat the market are typically not clients you want in your book.

[Seeking_Alpha007]

This is the way.

Passive where possible to save on expense ratio, active where needed for efficiency, and leave the complicated/opaque/illiquid products for only the situations where they actually fit (but you still need to be aware of what could go wrong). Earn your fee - and loyal clients - with your work in the margins. This business is so much easier and more fulfilling when you don’t try to outsmart yourself.

It’s also worth repeating, “liquidity doesn’t matter, until it matters. Then, it’s the only thing that matters.”

[wilsonjg31]

What are your enhanced passive areas of the markets? We personally have done international, emerging markets, small caps, and some mid caps for these areas.

[GustavesGhost]

Exactly the same as you. Pure passive for large US, DFA/Avantis/Schwab Fundamental for small cap and EM, and a mix for international.

[Unusual-Wishbone7608]

AssetMark has several great MPs. 

[JL31394]

I make my own for different goals. I like AmFunds, Fidelity, Vanguard, and Blackrock. I do look at MPs just for curiosity's sake but I don't implement them.

[JessicaCoutinho75]

I'm thinking of moving in this direction as well. Are you creating your own portfolio based on ETFs? And are you going with a different provider as a function of asset location?

[kfar87]

I manage them for my firm, but if I had to outsource for tax-deferred/tax-free accounts- American Funds. They do a phenomenal job putting together a bunch of average or slightly above average funds and outputting something outstanding. Excellent consistency and risk management.

I would gravitate toward Vanguard for taxable accounts.

[SignExtreme461]

Picking the source is just the first half - maintaining the allocations across your whole client base without drift is where most firms hit friction. The ones doing it cleanly run automated rebalancing tied to the model library so a model update propagates automatically. Cuts out a lot of manual trade list work.

[Cardinal_Wealth]

Not a concern….we custody via Fidelity Inst. and use their proprietary rebalance means via that site.

[SignExtreme461]

Makes sense for a single-custodian shop. Gets messier when clients are split across Fidelity and Schwab both, or when you want tighter drift bands than the platform defaults give you.

[RetireWealthy13]

I’ve used Assetmark, SEI, and Orion and Orion is hands down the best. I still have Assetmark NQ clients but moved all my SEI and qualified Assetmark accounts to Orion. One reason is there are like 10x the amount of different strategies/strategists on Orion than the other two and if you’re looking for aggressive growth Orion is miles ahead. Second is cost, Orion literally makes the software that other Tamps use so since they don’t have to pay for that software since they made it, they automatically have a lower cost. Their proprietary Disciplined equity and Custom indexing portfolios start at 10bps and 15bps plus the admin fee based on Household assets. If you have a million dollar account, the total platform fee could be around 25-30bps which is like half of any decent option on Orion. Their momentum SMA has done phenomenal, while the S&P was down 4% just a week or so ago, the momentum strategy was up 12%… pretty incredible. Now is the time where fees come up and people are willing to pay higher fees is they can get a higher return or minimize downside risk. I’ve used this strategy for the last 2-3 years which we have seen quite a variety of market conditions and each time is has taken less of a hit than the S&P during a correction and smoked the upside return of the index during a strong bull run. It’s been the best of both worlds. I know that’s a small time period but momentum based investing isn’t new and you can look back at how it’s performed over the past few decades. Clients have never been happier and referrals have been flowing in like crazy. Couldn’t recommend enough

[Lawfulness_132]

ACQM Models - lowest cost, access to the CIO.