Episode summary
Wealth Management Invest: Model Portfolio Trends with Invesco’s Karl Desmond
Summary
Karl Desmond said model portfolios are growing because they create scalability for advisors, letting them outsource asset allocation, manager research and portfolio construction so they can spend more time on clients, planning, taxes and business development. He described the market as split between pre-built, off-the-shelf portfolios and custom model portfolios, with the custom side getting more traction because advisors want a seat at the table and a product that reflects their own philosophy.
On the pre-built side, Desmond said the biggest demand is for multi-asset target-risk portfolios, not sleeve-based completion portfolios. He said advisors increasingly prefer one-stop solutions, and that thousands of model portfolios now exist across the market, making differentiation difficult. In custom portfolios, Invesco starts from scratch and can adjust asset allocation, including U.S. versus international exposure and alternatives, while also honoring preferred managers or even specific tickers.
Desmond also argued that tax-aware transitions matter because they can preserve appreciated holdings and reduce disruption for existing clients. He said alternatives and private markets add education, liquidity and rebalancing challenges, and that model portfolios work best when paired with wealth technology for trading and tax management. He added that streamlined portfolios can help RIAs free up time and make succession or sale transitions easier.
Key takeaways
- Desmond said the main appeal of model portfolios is scalability, because advisors can delegate portfolio construction and reclaim time for client-facing work.
- He said Invesco sees the most demand for multi-asset target-risk portfolios, while completion portfolios have attracted less interest.
- Desmond said custom model portfolios let advisors preserve their philosophy by adjusting asset allocation, manager lineup and even specific tickers.
- He said tax-aware transitions are especially important in non-qualified accounts because they can keep appreciated holdings in place and minimize disruption.
- Desmond said alternatives can fit model portfolios, but illiquid strategies create implementation and liquidity challenges that require better tech and education.
- He said streamlined model portfolios can support advisor succession, practice sales and more efficient RIA operations.
Notable quotes
“financial advisors have a lot on their plate. They're not just doing investment management”
“there's really two flavors. So, let's call them sub flavors now”
“we start from scratch. We're we're um we don't take the start with the pre-built and just make some tweaks, and here you go”
“Taxes are a big topic. So, when we're talking to advisors about non-qualified assets and building non-qualified tax-aware portfolios, that's where those ticker mandates really matter”
How the episode opens
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Hello and welcome back to the Wealth Management Invest podcast. I'm your host, David Bodamer, editorial director with Wealth Management. You can find us at wealthmanagement.com if you are not familiar with our work. Um and excited to have another conversation here with a important person in the industry, Carl Desmond, who is a senior client portfolio manager at Invesco. Carl, welcome to the podcast.
Thank you. Thanks for having me, David. — So, we're going to talk a bit about um model portfolios, but before we kind of get into the questions I have, I just wanted to give you an opportunity to tell folks a little bit about yourself. And I'm sure I would assume a lot of most people have heard of Invesco, but if you could just talk a bit about where you sit within Invesco and uh and um how you liaise with the advisor world.
Yeah, absolutely. So, um yeah, for those that don't know Invesco, uh we are we're about at a 2.5 trillion in assets. So, um you know, a large asset manager, global uh footprint.
Um most of those assets are in the US. Uh some may know us for our ETF lineup. We're the fourth largest ETF provider uh in the asset management industry.
Uh where I sit at the firm uh is in our solutions and custom strategies group, which is a recently renamed group, um but really our multi-asset team. So, we're we're tasked with building multi-asset portfolios for both institutional and uh financial advisor clients.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- model portfolios
- asset allocation
- tax-aware transitions
- private alternatives
- wealth technology
Companies and tickers mentioned
- Invesco
Watch the episode
Watch “Wealth Management Invest: Model Portfolio Trends with Invesco’s Karl Desmond” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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