J.P. Morgan rolls out digital model portfolio tool

J.P. Morgan Asset Management launched a digital tool via its U.S. funds website that allows any financial adviser to access and analyze 24 model portfolios by J.P. Morgan at no cost. 

J.P. Morgan gave InvestmentNews a demo of the new tool, which launched Tuesday. It operates in a similar manner to Amazon or any other e-commerce website: Users filter searches based on needs and are presented with customized results. 

For example, on the website the adviser can explore the different models and filter options based on a client’s profile — including their investment goals, risk tolerance and investment vehicles — and the tool automatically generates which models are suitable. All the models are built with J.P. Morgan Asset Management funds.

Once a user chooses which models work, they can “subscribe” to the different models, which means they’ll receive an email notification of any changes in the portfolios that they’re tracking, said Ted Dimig, head of advisory at J.P. Morgan Asset Management. 

The additional information sent directly to advisers when any tactical changes occur in the models is key, considering that advisers have struggled to adopt model portfolios despite the approach’s increasing popularity. So far this year, 2,000 advisers have run 17,000 analyses with J.P. Morgan’s models. 

“One of the bigger hurdles over time for advisers to get a bit more comfortable when it comes to model portfolios is making sure they know what’s going on and when it’s going on,” Dimig said. “So when they’re sitting across the table or across Zoom with a client, they can be in a position to articulate what’s going on to those end client accounts.” 

Once an adviser uses the tool to analyze which models work, they can click up to three of the models to compare them and get a side-by-side snapshot of information like basic performance, expenses and volatility, said Heather Beamer, head of U.S. portfolio insights at J.P. Morgan Asset Management. 

“If someone says, ‘I really like the JPMorgan Strategic 60-40 ETF model, I’d like to learn more,’ they can click an option to analyze or modify the model,” Beamer said. “Then at the end, they could generate an end client approved report through Finra and share it with the client.”

The new web-based experience also builds on J.P. Morgan’s announcement in December that it agreed to acquire 55ip in a deal that will expand access to model portfolios and automated tax technology. Advisers have the option to purchase models through 55ip, which provides access to 10 tax management-focused models. 

Assets in model portfolios are gaining traction as advisers continue to shift their value proposition from portfolio manager to financial wellness planner. Data provider Broadridge Financial Solutions estimates that model portfolios held a total of $4.1 trillion of assets in September, up from $3.5 trillion at the end of 2019. 

Adviser practices that use off-the-shelf model portfolios as their primary portfolio construction methodology had approximately $2.1 trillion in assets as of year-end 2020, according to data from Cerulli.