Ask the Manager: Michelle Cluver on Using Model Portfolios to Scale Your Business

In this edition of Ask the Manager, we caught up with Michelle Cluver, CFA, Head of Model Portfolio Solutions at Global X in New York, to discuss the growing interest in model portfolios. Michelle shares her thoughts on the ways model portfolios are being used today as well as suggestions that could help advisors balance efficiency with personalization.

It seems that interest in model portfolios has picked up recently. To what do you attribute that?

In our view, model portfolios are surging in prominence, with growth supported at both the home office and advisor level. Scalability, repeatable processes, continuity, and risk management are some of the reasons for this. In other words, the drive for efficiency is supporting model portfolio growth.

According to Broadridge research, around US$7.7 trillion currently tracks models, up from $6.6 trillion in 2024¹. This market is expected to rise at a compound annual growth rate (CAGR) of 15% to reach $13.2 trillion by 2029². This wave of change creates new opportunities for advisors as well as their clients.

Model portfolios are a powerful tool for scaling one’s business, but differentiation and customization are also rising in importance. Rather than serving as a one-size-fits-all solution, model portfolios are building blocks that advisors can combine to meet a wide range of client needs.

Whether they’re used to fully outsource investment management or to complement specific exposures within a broader portfolio, model portfolios enable advisors to balance efficiency with personalization. Scalable frameworks provide the operational consistency advisors need, while modular design allows for tailored outcomes that reflect each client’s goals, preferences, and evolving circumstances. As expectations rise, the advisors who succeed will be those who leverage models not just for convenience, but as strategic tools to deliver more precise, client-centric solutions at scale.

What’s the advantage of using model portfolios?

Model portfolios institutionalize the investment management process, helping to reduce both key-person risk and operational risk. They deliver a documented, repeatable investment process that aims to provide clients with consistent, research-backed portfolio management. This may reduce the risk of ad-hoc or emotional decisions. Additionally, a repeatable process supports business continuity and succession plans. This reduces risk for clients while potentially adding value to your business.

Not only do model portfolios provide cost-effective access to professionally managed portfolios, but they’re also an easy way for advisors to scale their practice. Some advisors may use these tools across their whole book of business, while in other cases there may be specific exposures or types of clients where models provide additional benefits.

Investment research and due diligence are some of the most important but time-consuming processes that advisors engage in. Partnering with a trusted third party can offer improved access to timely portfolio positioning insights and enhanced vetting of key exposures.

Operational efficiencies free time for advisors to deepen client relationships. This helps them stay informed about clients' changing life events, goals, and needs, creating deeper trust and satisfaction. Personalized attention, especially for clients with more complex financial needs, strengthens loyalty and positions advisors as indispensable partners.

Any suggestions for advisors considering models? For example, are there specific exposures that are well suited to client access through models?

Most financial advisors don’t specialize in analyzing and incorporating key structural themes within portfolios. I think that’s one reason, over the last year, that there’s been an uptick in advisors and home offices looking for solutions as clients ask more questions about exposure to AI and other up-and-coming technologies.

We’re at an inflection point where technologies are converging, with AI becoming integrated across a multitude of software and driving breakthroughs across drug discovery, self-driving vehicles, automation, and more. Innovation never stops, building on the foundation of prior breakthroughs and redefining the investment landscape of today.

We see thematic investing as an integral part of portfolio construction, and thematic model portfolios are a convenient tool to help clients invest at the cutting edge of innovation as technology evolves. In our view, long-term exposure to appropriately scaled diversified thematic equity can help minimize the need to time the hot new trend.

Earlier you’d mentioned customization as a growing trend. What does this look like and how are models being used?

Model portfolios are building blocks that can be combined to form bespoke client solutions. Model portfolios can generally be viewed in two groups – core and satellite solutions.

Core solutions can be a client’s entire portfolio as they are diversified across asset classes and are available at different risk profiles. A core portfolio can be complemented with the addition of satellite solutions based on client-specific preferences. For larger accounts, it’s also possible to combine several satellite portfolios into a truly customizable and well diversified portfolio solution.

At Global X, we view multi-manager solutions as the path forward for the industry. Advisors can tailor solutions to client preferences while remaining within a framework that’s manageable to monitor and execute. Incorporating a thematic sleeve into a multi-asset portfolio is a simple example of multi-manager solutions.