The Top Four Ways Model Portfolio Platforms Create Simplicity and Growth

Posted by Andrea Collatz on July 31, 2012

Advisors looking to grow often find they are confronted with a dilemma: the larger their firm becomes, the more likely the strong investment performance that drives growth will falter without additional staff and resources.

Model portfolio platforms can be a great solution for advisors looking to grow. Some advisors may not realize that the technology supporting model portfolios has changed over the years, and may still be trying to grow the old fashioned way. However today’s model portfolio solutions help advisors scale their practice so they can grow more effectively. 

Wondering exactly how model model portfolio platforms can simplify your business? Here are the top four ways:

Simplified Money Management

Advisors that use model portfolios enjoy easy adjustments to existing strategies and smooth rebalancing, as well as the ability to quickly introduce new investment options or strategies. Plus, when multiple strategies fit a client, each strategy can be plugged into the client’s single account and fine-tuned as needed. If the client holds legacy or out-of-strategy assets, model portfolio platforms instantly incorporate the extraneous securities into the client’s account without disrupting his or her strategies.

Streamlined Trading

Model portfolios dramatically decreases the time needed to enter, execute, and reconcile trades, whether across hundreds or even thousands of accounts. This eliminates the need for additional staff and frees time for client contact. Meanwhile, calculation and reconciliation errors drop to zero, as does the likelihood of omitting a client account or mishandling a legacy or out-of-strategy holding. Ideally, the automated process will also include real-time position trading. This allows for quick moves in and out of the market and efficient cash processing. Real-time trading also eradicates the client-level issues that come from trading a large book of business account-by-account.

Scalable Back Office Processes 

The effort required to invest a new client’s assets at a firm using advanced model portfolio functionality simply equals the time needed to enter the individual’s vital information and allocate his or her funds to the existing model portfolios. That’s it. All of the necessary trading flows through the system. So, too, do all performance reporting, all gain/loss tracking and reporting, and all fees tied to any new piece of business. Down the road, consolidated client statements and online account access help keep clients focused on the big picture.

Sophisticated Investment Capabilities

Some advisors would love to expose their clients to several investment strategies, but their hands are tied by the limitations of their current processes. The efficiencies of model portfolio platforms allow advisors to develop and refine strategies based on market drivers and in-depth analysis without worrying about a trading system’s limitation.

If you are thinking about making the switch to a model portfolio platform, now may be the right time. With the potential to create greater flexibility in your practice while freeing up more time to spend on your client relationships, model portfolio platforms may be just the solution to your growth conundrum.

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