A model portfolio is standardised by design. The reason it was selected for you should not be.
A model is a pre-designed mix of investments used for clients with broadly similar objectives or risk ranges. A discretionary fund manager may be authorised to change the underlying funds and rebalance that model within a mandate.
This can make portfolio management consistent and efficient. It also means your statement may show several layers: a platform, model, DFM and underlying funds. You should know who designed the portfolio, who can alter it, how your advisor selected the model and who monitors whether it still fits your circumstances.
Being placed in a model does not replace personal advice. Your goal, time horizon, access needs, tax position and ability to absorb losses still matter. Nor does frequent model activity prove value; changes should follow the mandate and process.
Try this now
Find the model name and mandate on your latest documents. Record its target asset mix, allowable ranges, DFM, total cost and the date your personal suitability was last reviewed.
Ask your advisor
- What decisions are delegated to the DFM and what remains your responsibility?
- What would cause me to move to a different model?
- Are there ownership or remuneration relationships between the parties?
The model may be standardised; the reason for selecting it for you should not be generic.