The investment management industry is evolving, as evidenced by most major asset managers realizing that model portfolios—not individual fund offerings—are what advisors increasingly want to purchase. Advisors are demanding more than just generic, off-the-shelf model portfolios. They want solutions that offer real customization, greater control, and cost efficiency. As the recent Morningstar report highlights, custom model portfolios have seen explosive growth, exceeding $125 billion in assets. However, what most firms label as "custom" is, in reality, simply "editable"—allowing only minor tweaks within predefined frameworks rather than true customization. At Modelist, we are redefining what it means to offer a truly custom investment solution.
Check out the great report from Morningstar here:
Customization: Beyond the Industry Standard
Morningstar’s research outlines how many asset managers offer "custom models" but in a highly constrained manner. Advisors may be able to swap a few funds or adjust allocation bands, but the core strategy remains locked within the asset manager’s framework. This is not customization; it’s a minor level of flexibility.
At Modelist, we offer a Guided Rep as PM process that allows financial advisors to create fully customized investment models—not just tweak an existing structure. We work with advisors to build models that align with their specific investment philosophy, incorporating strategies that fit their client base while maintaining operational efficiency. Unlike most model providers, we are agnostic to fund selection, meaning we don’t push proprietary products or limit advisors to a specific menu of funds.
Control: Who’s Really Managing the Money?
The Morningstar report highlights that many advisors resist model portfolios because they feel they lose control over asset allocation and fund selection. This is a real concern—especially when the firms creating "custom" models are also asset managers with a vested interest in selecting their own funds.
Are you truly a fiduciary if your asset allocator and fund selector have a financial incentive to push their own funds?
This is a question we regularly pose to advisors. Many firms offering "free" models are simply using advisors as distribution channels for their products. These firms make it difficult to swap out expensive or underperforming funds, ultimately limiting an advisor’s ability to act in their clients' best interests.
At Modelist, advisors maintain full control over fund selection, portfolio structure, and risk exposure. We empower them with data-driven insights, tactical flexibility, and research-backed strategies, allowing them to be the true portfolio managers without sacrificing efficiency.
Cost: The Hidden Price of "Free" Models
One of the biggest red flags in the industry is the rise of so-called "free" model portfolios. The Morningstar report highlights how large asset managers—BlackRock, State Street, JP Morgan, and other boutique managers—are offering "free" models that come with serious hidden costs:
Limited fund flexibility – Advisors are locked into proprietary products, even when better options exist.
Higher expense ratios – Many of the funds within these "free" models have internal costs exceeding 1%.
Fiduciary concerns – Advisors may unknowingly prioritize the asset manager’s profitability over their client’s best interests.
We frequently remind advisors: is it really free, or are you the product?
At Modelist, we take a different approach. Our fee structure is transparent, and our goal is to help advisors maximize client experiences—not asset manager profits. By offering access to a broad range of investment vehicles without bias, we ensure that every model is built with fiduciary integrity.
The Modelist Advantage: A New Standard in Custom Models
The shift toward model portfolio customization is clear, but the industry is still catching up. Most firms treat customization as an afterthought—a marketing feature rather than a core philosophy. Modelist is leading the charge by providing advisors with:
True customization, not just "editable" models.
Full control over asset allocation and fund selection.
Cost-effective solutions that put the advisor and client first.
Agnostic fund selection, ensuring there’s no hidden agenda.
A Guided Rep as PM process that empowers advisors to scale without compromising their investment philosophy.
As the industry grapples with conflicts of interest, increasing scrutiny on "free" models, and a growing need for scalable investment solutions, Modelist stands out as the firm that truly puts advisors in control.
Are you ready to build investment models that are actually customized—not just editable? Let’s talk.
Make the most of these insights using Modelist. We create customized investment models for the fiduciary financial advisor. Get in touch with us at hello@modelist.me for a personal consultation.
Modelist Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.