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Investors in Model Portfolios Are More Confident, Less Stressed Amid Ongoing Market Volatility, Finds Natixis Investment Managers SurveyAfter recent bouts of volatility and inflation, just one in three Americans feels confident about the state of their finances right now. Yet those invested in model portfolios are nearly two times more likely to express confidence (45%) than non-model users (24%), according to new survey findings published today by Natixis Investment Managers (Natixis IM). This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20231026068898/en/ Where fund selectors are looking to add models (Photo: Business Wire) Model portfolios - the highly-vetted asset allocation strategies professional money managers use to build investment portfolios around specific risk and return or portfolio objectives - were once the domain of institutional investors. Their use has greatly expanded in recent years, and as of 2022, most financial advisors (93%) are now using model portfolios to manage some or all of their clients' discretionary assets, as Natixis IM has previously reported. A new report from the Natixis Center for Investor Insights takes a deeper look at the use, drivers, and evolution of model portfolios, building on previously released data from the Natixis IM 2022 survey of financial professionals with new, never-released data from Natixis IM's 2023 surveys of individual investors in the US as well as findings from Natixis IM's 2023 survey of the investment professionals responsible for selecting funds and other investment products on their firm's advisory platforms, into which $17.5 trillion in client assets are invested. Taken together, the findings show that model portfolios are proving to be a win-win-win for investors financial advisors and advisory firms, particularly in light of the changing investment landscape and increased regulatory focus on investor protections and product suitability. Key findings include:
"The diversification and targeted risk/return attributes of model portfolios make a strong case across a broad investor base," said Marina Gross, Head of Natixis Investment Managers Solutions. "Models greatly streamline the investment process and arm financial advisors with institutional quality portfolio management accompanied by deeper insights and rationale to talk with clients about allocation changes, risk and portfolio performance."
Models allow advisors to advise on what matters most to clients
"Investors are telling us that the most important facets of their relationship with an advisor are activities that define a more holistic approach and more personalized service," said Dave Goodsell, Head of the Natixis Center for Investor Insights. "Model portfolios free up time for advisors to introduce clients to a broader set of services and demonstrate the value of advice beyond allocation." In addition to a higher degree of confidence in their finances and trust in their advisors, model investors have characteristics that are distinctly and statistically different from non-model users. First and foremost, model clients think the most important facet of their advisor relationship is that they are getting financial planning advice (49%). Financial planning also is important to 43% of investors not in models, but that 6% difference speaks volumes when looking deeper at the services clients are interested in getting from their advisor. The survey found that the professional services most wanted by model users versus non-model users are as follows:
<>Models are evolving: Customization without compromise
Natixis IM's 2023 survey of professional fund selectors found that:
"Model portfolios have evolved in such a way that it's possible to add sleeves with specific attributes and to mix and match in-house and third-party models or core and specialty models," added Marina Gross. "Financial advisors can customize portfolios to their liking depending on clients' goals and risk tolerance, at scale and without compromising investment quality." One key area that 46% of fund selectors say their firms are looking to add are tax-efficient models for high-net-worth investors, a finding that Natixis IM reported earlier in the year. In general, these high-net-worth models incorporate the diversification benefits of traditional models with direct indexing, making it possible to implement tax-loss harvesting at scale - or the sale of "down positions" to offset capital gains in other positions - an active strategy that's not possible with investments in passively-managed index funds. Other models that firms are looking to add include a focus on income (44%), alternatives (43%), environmental, social and/or environment factors (34%), and thematics (26%) that capitalize on macro trends and other innovation areas. Natixis Investment Managers' full report, entitled Model Citizens: Model Portfolios align firms, advisors, and client goals, can be found by visiting https://www.im.natixis.com/us/research/2023-models-report. Natixis IM's report on model portfolios builds on findings from:
Methodology
About the Natixis Center for Investor Insight
About Natixis Investment Managers
Headquartered in Paris and Boston, Natixis Investment Managers is part of the Global Financial Services division of Groupe BPCE, the second-largest banking group in France through the Banque Populaire and Caisse d'Epargne retail networks. Natixis Investment Managers' affiliated investment management firms include AEW; DNCA Investments;3 Dorval Asset Management; Flexstone Partners; Gateway Investment Advisers; Harris Associates; Investors Mutual Limited; Loomis, Sayles & Company; Mirova; MV Credit; Naxicap Partners; Ossiam; Ostrum Asset Management; Seventure Partners; Thematics Asset Management; Vauban Infrastructure Partners; Vaughan Nelson Investment Management; and WCM Investment Management. Additionally, investment solutions are offered through Natixis Investment Managers Solutions and Natixis Advisors, LLC. Not all offerings are available in all jurisdictions. For additional information, please visit Natixis Investment Managers' website at im.natixis.com | LinkedIn: linkedin.com/company/natixis-investment-managers. Natixis Investment Managers' distribution and service groups include Natixis Distribution, LLC, a limited purpose broker-dealer and the distributor of various US registered investment companies for which advisory services are provided by affiliated firms of Natixis Investment Managers, Natixis Investment Managers S.A. (Luxembourg), Natixis Investment Managers International (France), and their affiliated distribution and service entities in Europe and Asia.
1 Cerulli Quantitative Update: Global Markets 2023 ranked Natixis Investment Managers as the 17th largest asset manager in the world based on assets under management as of December 31, 2022.
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View source version on businesswire.com: https://www.businesswire.com/news/home/20231026068898/en/ |