Model Wealth Portfolios

Combining Institutional Access With A Disciplined Approach

Model Wealth Portfolios is an investment platform that offers portfolios from a variety of professional money managers, each of whom provides a specialized philosophy, process, and market outlook.

These money managers follow well-defined, repeatable processes for building and managing portfolios. Some are institutional managers who build portfolios for large foundations or endowment funds. In many cases, individual investors can only access these strategies by investing millions of dollars. With Model Wealth Portfolios, you get access to these institutional managers with some models starting as low as $10,000.

Based on your specific needs, we can use one or more models to create a diversified investment plan. With this type of flexibility in model selection, we can create a strategy that aligns with your current life and future goals.

Step 1. Clarify Your Goals and Timeline

The first step in building your Model Wealth Portfolios strategy is determining your financial goals and when you want to accomplish them.  I’ll sit down with you to clarify what you hope to achieve from your investments, whether that’s saving for a child’s college education, working toward a large purchase, or planning for retirement.  Together, we’ll establish goals that will guide my strategy decisions.

Step 2. Determine Your Risk Tolerance

Once we know what you hope to accomplish, the next step is figuring out how you feel about investing. I’ll spend time working with you to determine if you prefer a more conservative or aggressive approach, or somewhere in between.

Step 3. Identify An Investment Style

Next, I’ll work with you to determine which investment style is best for your specific goals and current market conditions. The two primary investment-style options are strategic and tactical.

Strategic investing allows you to stay fully invested in a steady asset allocation model using a traditional buy-and-hold investment philosophy. Your asset allocation would be based on the manager’s long-term market outlook and wouldn’t change much due to market fluctuations.

Tactical investing attempts to take advantage of short-term market fluctuations to find opportunities for larger gains. In this case, your asset allocation would be based on a shorter time frame and change more often as a result of the market’s movements.  Because more trading occurs in tactical investing, we’d have to consider the tax impact of this type of strategy. There’s a wide variety of tactical investment management styles, which we’ll discuss when it’s time to look at the models best suited for you.

We can also choose to combine strategic and tactical models if it makes sense for you and your objectives.

Step 4. Select Your Investment Theme

The last major piece of the portfolio puzzle is your investment theme, which is the overall objective your portfolio will drive toward. Your goals, risk tolerance, and preferred investment style will help me determine the best theme for your portfolio. Model Wealth Portfolios portfolio themes are: core, income generation, risk aware, and complementary.

Model Wealth Portfolios portfolio themes are: core, income generation, risk aware, and complementary.

Your investment theme is the main objective I’ll work toward when building your portfolio, as well as the benchmark I’ll use to gauge the portfolio’s ongoing success. Rather than comparing your account’s performance with the financial markets, we’ll examine whether or not your portfolio is tracking with its stated goal. For example, if you and I collectively determine we’ll use a core investment theme—which has a goal of slowly growing your account over the long term rather than reaching for big spikes in account value in the short term—we’d expect to see a gradual increase in your account’s value. Even if the market has large increases, it wouldn’t make sense for your account to follow suit in this case.

Step 5. Select Strategies

These four puzzle pieces—goal, risk tolerance, style, and theme—are the foundational pieces I’ll use to narrow down the managers and models that will work for you. I have the option to choose models primarily made up of exchange-traded funds or mutual funds, or separately managed accounts (SMA) strategies. Separately managed accounts have some similar features to a mutual fund, but allow you to own individual equities/securities and offer access to specific investment strategies, asset classes, or styles. I will research the managers and models that fit with your preferences and objectives, and select those I think are appropriate for your situation and have tracked well with their stated account goals. Although one model may be most effective for you, I can also choose to combine multiple models to provide additional diversification and create the optimal portfolio for you. If you have any specific requests or needs that call for it, I can customize your portfolio further by adding models that focus on providing tax management, access to nontraditional investment strategies, additional income, or socially responsible investments. The end result will be a portfolio customized for you and designed to work toward your individual goals.

Step 6. Set Allocations

After I’ve selected the models I’ll be using in your portfolio, I’ll determine the percentage of your portfolio each model will represent. For example, if I use two models, one may represent 60% of your portfolio, and the other 40%. Within each of these models are diversified investments—so you get diversification on top of diversification.

Our Responsibilities as Your Advisor

• Providing personal consultation and ongoing advice.
• Selecting appropriate managers and models and combining them for the most optimal portfolio.
• Monitoring your plan, managers, and model performance on an ongoing basis.
• Leveraging our knowledge of markets, asset allocation, and portfolio construction to ensure the managers and models we use are working for you.
• Reporting performance

The Managers’ Responsibilities

• Researching and selecting securities for the portfolios.
• Monitoring the portfolios to ensure they're staying in line with the stated objectives.

A TEAM AT YOUR BACK

Model Wealth Portfolios allows us to be the “manager of the managers” and combine managers in an optimal way to help you pursue your goals. Rather than having one or two advisors building your portfolio, you will have an entire team of experienced, knowledgeable money managers working to build and implement strategies that address your goals. You will have access to the knowledge of individuals studying the market and its products every day. In turn, we will research the managers, their methods, knowledge, and practices to select the right ones for you.

HIGH-LEVEL SERVICE

By working with the Model Wealth Portfolios managers, we can spend the time necessary to look at your situation, needs, and goals from a holistic perspective. As the director of your financial strategy, we can focus our energy on you and provide you the services you need and want to work toward your goals. We will apply our knowledge to manager selection and monitoring, and focus on providing you a true wealth management approach.

WORKING TOGETHER

Partnering with money managers means we can work alongside you to determine the appropriate strategy for your unique situation. We will work as a team to help you work toward your financial goals.

INSTITUTIONAL ACCESS

Using Model Wealth Portfolios means we can work with the products and asset classes used by institutional firms and ultra-high-net-worth individuals. We will also have access to investment vehicles like boutique mutual funds and exchange-traded products. In addition, the platform gives us the ability to choose separately managed account strategies, which are similar to mutual funds or ETFs, but enable you to own the individual securities themselves, rather than just the fund.

AUTOMATED SERVICES

You will get access to important features like rebalancing and tax-loss harvesting. Over time, your portfolio may drift from its intended allocation due to market movements, so LPL will monitor your account to ensure it’s rebalanced to stay within the risk profile we select together. Tax harvesting allows us to sell securities at a loss if needed to offset capital gains and potentially reduce your tax impact.

DISCIPLINED PROCESS, EXPERIENCED MANAGERS - FOCUSED ON YOU!

With our assistance and guidance, Model Wealth Portfolios can help you work toward achieving your goals through an asset management strategy that provides a disciplined investment process backed by comprehensive resources and experienced managers. With Model Wealth Portfolios, we can help you pursue your goals and design the future you’ve always envisioned.