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WisdomTree launched its first ETFs in June of 2006, and is currently the industry's seventh largest ETF provider. WisdomTree sponsors 93 distinct ETFs that span asset classes and countries around the world. Categories include: U.S. and International Equity, Currency, Fixed Income and ... more

Busting Model Portfolio Myths

Date: Monday, August 10, 2020 7:19 AM EDT

This article is relevant to financial professionals who are considering offering model portfolios to their clients. If you are an individual investor interested in WisdomTree ETF Model Portfolios, please inquire with your financial professional. Not all financial professionals have direct access to these model portfolios.

Recently, we discussed some of the misperceptions advisors have about how clients perceive model portfolios. We talked about how clients actually welcome models, believe they bring additional expertise to their portfolios, and how they believe models will positively impact the performance of their portfolios.

But we thought it would also make sense to provide clarity not only on what advisors’ clients think about models but also on what they think about their advisors. We spoke to investors in late 2019 and early 2020 and then again after the March 2020 pandemic-related volatility. Here’s what we discovered.

Clients value their advisors

Investors see their advisors as critical to their success. They expect you to conduct extensive research with far more technical and in-depth information than investors themselves can access through Google.

  • More than 90% of clients see their advisor as a critical part of their financial success
  • 82% of investors prefer to get their financial advice through human interactions

Clients value your advice—especially since the recent volatility

Following the recent volatility, we found that clients place more value on the quality of the advice and education they get from their advisor and less on the idea of “customized” services:

  • The number of clients who value the high-quality financial services provided by advisors increased by 30%
  • The number of clients who felt it was important for an advisor to use technology to enhance investment decisions increased by 5% post-volatility
  • The number of clients who felt it was important for an advisor to focus on goal-based portfolio planning increased by 5% post-volatility
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