Despite the prevalence of third-party model portfolios, only a small number of financial advisors have adopted model portfolios in their practice.

To find out why, WisdomTree conducted the industry’s most comprehensive study on the adoption and perception of third-party model portfolios; interviewing financial advisors, and—most importantly—investors.

The study revealed that third-party model portfolios have helped drive financial advisor growth, gaining 20 percent more clients and improving client retention by 33 percent.

But it’s easier said than done.

We uncovered more than 40 unique hurdles that stand in the way of successful model portfolio adoption into an advisor’s practice. So, what makes the journey worth it? Investor preference.

We found that 86 percent of the investors we spoke to, are not only open to their advisor using model portfolios, but actually welcome model portfolio usage.

WisdomTree set out on a quest to address the numerous hurdles by offering a comprehensive destination: the Model Adoption Center or MAC; providing advisors with a guided journey covering research, communication and analytical tools, and model portfolio offerings needed to become a truly Modern Advisor.

Our industry-leading research conducted with hundreds of advisors and nearly 2,000 investors highlights the positive perception of using third-party model portfolios in practice.

Discover the key research highlights and evolution of model portfolios, read the in-depth white paper, and learn about advisor best practices.

Our research showed that while investors are receptive to third-party model portfolios, financial advisors struggle with conveying their professional value when using them. This module solves for that by providing the necessary tools such as customizable content on model portfolios, investment strategy updates and outlooks.

Here, advisors get direct and unparalleled access to our Asset Allocation team, to look under the hood of our model portfolio strategies and methodology. A live chat feature provides instant answers to advisor questions from one of our model portfolio subject matter experts.

Investment decisions are often based on an individual's unique set of emotions and biases.  That's why we created a first of its kind Behavioral Finance Tool that lets advisors personalize their client's portfolio based on their individual tendencies.

The tool combines behavioral preferences, financial goals, and current portfolio holdings to offer tailored model portfolio suggestions; with the ability to keep a portion intact and assess the impact of blending in model offerings.

WisdomTree Modern Alpha® ETF Model Portfolios combine the performance potential of active approaches with the discipline of passive investments to help investors pursue their objectives for growth, income or wealth preservation using an open architecture approach.

Plus, our collaboration with Professor Jeremy Siegel is the first of its kind, bringing a unique model portfolio solution for those seeking to balance investors’ current income needs with longevity risk.

Dig deep into the model portfolio investment objectives, performance data, exposures and other key metrics in this module.

Ready to start transitioning? We will guide you.

Many advisors who participated in our study voiced confusion on how to navigate the intricate landscape of model portfolio platforms and options available. This module makes it easier for advisors to add WisdomTree models to their client’s portfolios.

To get started, select a custodian or integrated technology platform and follow the navigation provided.

The financial advisory industry is changing rapidly along with client needs and preferences. The WisdomTree research confirmed that investors are looking for a modern approach from their advisors and for majority of them, that means leveraging model portfolios.

A modern advisor needs to provide:

• A customized approach to help satisfy client needs.
• Personalized service for each client while displaying confidence and leveraging expertise.
• Low cost, tax-efficient investment options that don’t sacrifice performance.
• And control over how model portfolios are applied to client portfolios.

Start your journey to becoming a modern advisor today at WisdomTree.com/mac.

Before investing carefully consider a fund's investment objective, risks, charges, and expenses contained in the prospectus at WisdomTree.com. Read it carefully.

Important Information

For retail Investors: WisdomTree’s Model Portfolios are not intended to constitute investment advice or investment recommendations from WisdomTree. Your investment adviser may or may not implement WisdomTree’s Model Portfolios in your account. The performance of your account may differ from the performance shown for a variety of reasons, including but not limited to: Your investment adviser, and not WisdomTree, is responsible for implementing trades in the accounts; differences in market conditions; client-imposed investment restrictions; the timing of client investments and withdrawals; fees payable; and/or other factors. WisdomTree is not responsible for determining the suitability or appropriateness of a strategy based on WisdomTree’s Model Portfolios. WisdomTree does not have investment discretion and does not place trade orders for your account. This material has been created by WisdomTree and the information included herein has not been verified by your investment adviser and may differ from information provided by your investment adviser. WisdomTree does not undertake to provide impartial investment advice or give advice in a fiduciary capacity. Further, WisdomTree receives revenue in the form of advisory fees for our exchange traded funds and management fees for our collective investment trusts.

WisdomTree Model Portfolio information is designed to be used by financial advisors solely as an educational resource, along with other potential resources advisors may consider, in providing services to their end clients. WisdomTree's Model Portfolios and related content are for information only and are not intended to provide, and should not be relied on, for tax, legal, accounting, investment or financial planning advice by WisdomTree, nor should any WisdomTree Model Portfolio information be considered or relied upon as investment advice or as a recommendation from WisdomTree, including regarding the use or suitability of any WisdomTree Model Portfolio, any particular security or any particular strategy. In providing WisdomTree Model Portfolio information, WisdomTree is not acting and has not agreed to act in an investment advisory, fiduciary or quasi-fiduciary capacity to any advisor or end client, and has no responsibility in connection therewith, and is not providing individualized investment advice to any advisor or end client, including based on or tailored to the circumstance of any advisor or end client. The Model Portfolio information is provided “as is,” without warranty of any kind, express or implied. WisdomTree is not responsible for determining the securities to be purchased, held and/or sold for any advisor or end client accounts, nor is WisdomTree responsible for determining the suitability or appropriateness of a Model Portfolio or any securities included therein for any third party, including end clients. Advisors are solely responsible for making investment recommendations and/or decisions with respect to an end client, and should consider the end client's individual financial circumstances, investment time frame, risk tolerance level and investment goals in determining the appropriateness of a particular investment or strategy, without input from WisdomTree. WisdomTree does not have investment discretion and does not place trade orders for any end client accounts. Information and other marketing materials provided to you by WisdomTree concerning a Model Portfolio - including allocations, performance and other characteristics - may not be indicative of an end client's actual experience from investing in one or more of the funds included in a Model Portfolio. Using an asset allocation strategy does not ensure a profit or protect against loss, and diversification does not eliminate the risk of experiencing investment losses. There is no assurance that investing in accordance with a Model Portfolio's allocations will provide positive performance over any period. Any content or information included in or related to a WisdomTree Model Portfolio, including descriptions, allocations, data, fund details and disclosures are subject to change and may not be altered by an advisor or other third party in any way.

WisdomTree primarily uses WisdomTree Funds in the Model Portfolios unless there is no WisdomTree Fund that is consistent with the desired asset allocation or Model Portfolio strategy. As a result, WisdomTree Model Portfolios are expected to include a substantial portion of WisdomTree Funds notwithstanding that there may be a similar fund with a higher rating, lower fees and expenses, or substantially better performance. Additionally, WisdomTree and its affiliates will indirectly benefit from investments made based on the Model Portfolios through fees paid by the WisdomTree Funds to WisdomTree and its affiliates for advisory, administrative and other services.

Ryan Krystopowicz :  I’m really excited to share some innovative research WisdomTree recently conducted that focuses on leveraging Model Portfolios to drive business growth. No matter what we call it, a model is simply a framework to structure asset allocation and fund selection in your practice for your clients. Leveraging third-party model portfolios is all about you and your clients.

Think about your general practitioner; this is the doctor you trust, the doctor who knows everything about you. It is their job to think about your health holistically and leverage the resources at their disposal such as bringing on specialists as needed. No one knows your clients like you do from an investment perspective.

Advisors that leverage third-party model portfolios are combining valuable research and data with their intimate knowledge of their client needs. In fact, 63% of investors equate an advisor understanding their financial needs and applying a model portfolio to a doctor conducting an assessment of their overall health. And 60% of our audience said that the use of a preset investment model portfolio would be an upgrade to their current portfolio. And by the way, that 60% goes up to 70% for millennials. We found that millennials are particularly receptive to leveraging both external resources and technology to potentially achieve better outcomes. 

What we believe to be another crucial finding from our research is that at any point in time, approximately 38% of clients are thinking about looking for a new advisor. That number jumps up to 58% if the new advisor is leveraging third-party model portfolios and properly promoting that value. Said in another way, in a head-to-head situation, an advisor who properly promotes the use of third-party model portfolios and strong collaborations has a higher likelihood to win the new client. Utilizing third-party model portfolios in your practice is way more than efficiency. It is about business growth.

So, keep that in mind as you think about your model portfolio selection and all the choices you have. WisdomTree can be a resource to support you and your pratice, including putting model portfolios to work for your clients. Visit our website or speak to your WisdomTree representative to learn more. Thank you.

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