A model portfolio is a defined target allocation that an adviser applies across many client accounts at once, rather than constructing each account individually.
Models exist because managing a hundred accounts individually does not scale, and the failure mode is not dramatic. It is drift — accounts that were supposed to be alike quietly becoming different from each other over years of separate decisions.
The target allocation and the rules for returning to it. When the model changes, every account following it changes together, in one operation rather than a hundred.
That also makes the firm's investment process reviewable. There is a documented decision, one place it is recorded, and one explanation for why every account did what it did.
A model is not a fund. The client holds the underlying positions directly at their custodian, which means the tax lots are theirs and the account can be customised at the margin.
Accounts with large embedded gains, concentrated legacy positions, or genuinely unusual constraints do not belong in a model without adjustment. Forcing them in is how a tidy operating process produces a bad client outcome.
Standardising the ninety percent that is alike is the point. Pretending the other ten percent is alike is the mistake.
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