Wealth Management Firms ‘Model Portfolios’​ are Inefficient and Sub-optimal

300,000 financial advisers in captive channels, with independent RIAs and Broker Dealers, in private banks and wealth platforms blindly trust their firm’s investment committee’s  generated house view. They place trillions of $ of client money in so called ‘model portfolios’.  We analyzed and modeled 10 firms’ published views using their own capital market assumptions to see how good a job such firms are doing. We can now quantitatively, and with detached objectivity open to third party scrutiny, demonstrate that such allocations are typically flat out wrong –  often leading to a +20% value destruction in expected returns. 

This is giving bad financial advice. Clients should Trust but Verify.

Best of all, any Financial Advisor or their client can now do this in ten minutes at ActiveAllocator.com


Author: Sameer_Jain

Partner. Sameer Jain is founder of FinTech ActiveAllocator.com, the world’s first portal that seamlessly integrates traditional, illiquid and alternative investments within portfolios. Prior to this he was Chief Economist & Managing Director at AR Capital. Before that he headed Investment Content & Strategy at UBS Alternative Investments. At UBS, he served as a non-voting member of the Wealth Management Research investment committee, and as a capital allocator was responsible for all illiquid investing including fund manager selection and due diligence across the platform. Prior to UBS he headed product development & investment research at Citigroup Alternative Investments that managed over $75 billion of alternative investments across hedge funds, managed futures, private equity, credit structures, infrastructure and real estate. Here he led a team that developed proprietary models for portfolio strategy and asset allocation with alternative investments, provided investment support and research to pension plans, sovereign wealth funds, endowments as well as internal clients including Citi Private Bank. Before this he was with Cambridge Alternative Investments and SunGard (System Access) where he travelled to over 80 countries for work across Europe, Asia, Middle-East and Africa. He has written over 30 academic and practitioner articles on alternative investments with thousands of downloads at SSRN, presented at over a hundred industry conferences and has coauthored a book, Active Equity Management. Mr. Jain has multiple degrees in engineering, management, public administration and policy and is a graduate of Massachusetts Institute of Technology and Harvard University. He is a recipient of the Alfred Sloan Fellowship and subsequently was a Fellow of Public Policy and Management at the Harvard Kennedy School of Government for a year. He holds Series 7 and 66 securities licenses.

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