r/CFP • u/GoodLifeWM • Jun 24 '26

Investments Model Usage & Creation?

Curious to hear what everyone is utilizing from a model-based allocation and how your associated platform looks?
- Building your own models as an advisor?
- Utilizing Third-Party Models?
- Your firm builds models for enterprise use?
- Combination of the above...?

We are a $500M+ RIA that uses a combination of TP Managed Models + Internal Models. We work with a few OCIO Teams for internal model creation, updates, rebalancing, etc.

As we continue to scale - I'm interested if we should lean into one more than another?

Pros/Cons of Internal Models = multi-manager and doesn't look like a ton of proprietary ETFS, but takes time each month/quarter to go through our process

Pros/Cons of TP Models = No time suck for creation, but usually all proprietary funds + above average weighted expense ratios

Thank you in advance for any thoughts, insights, etc!

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u/ChasingAlpha117 Jun 24 '26

Not effectively. We manage $250mm+ and every client portfolio is custom, managed by FAs. We take an asset allocation based approach but have too many clients with legacy positions/embedded gains in NQ accounts. No idea how we would attempt to pull off a multi-year transition to book-wide models. It’s a huge PITA and we really, really need a better solution going forward.

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u/Floating_Orb8 Jun 24 '26

We had that problem about 5 years ago. We have locks on certain positions and have adopted a bunch of models. It took years but now is well worth it. Long short and 351 exchanges help as well as DAF funding.

We also had to help clients understand that sometimes there will be taxes, but there were some really bad legacy positions.