What is Model Delivery in the Context of Asset Management?
Posted on 07/28/2021
What is a model delivery in the context of asset management?
Model delivery is when a portfolio manager transmits periodic (example: monthly) security weightings or buy and sell instructions to an investment platform. The platform then executes trades on behalf of its investors. The goal is to replicate the investment strategy with fidelity to the portfolio manager’s intent. Model delivery can be detailed or basic such as predefined asset allocation pie charts.
Background
Since the 2000s, model delivery portfolios have grown in adoption in the asset management industry. With regard to model delivery, it was prominently in packaged mutual fund advisory programs in which an advisor outsources discretionary investment management to an internal investment committee and/or research team at a distributor. The reason for creating these programs were to allow advisors to focus on gathering more assets and work on client relationships by outsourcing the portfolio management responsibilities.