Fairstone Investment Management

A Model Portfolio Service is a professionally managed investment solution where portfolios are constructed based on a specific risk level or investment goal. Each model portfolio is made up of diversified assets such as shares, bonds, and funds, and is regularly rebalanced by investment experts to stay aligned with its objectives. It provides a cost-effective and efficient way to invest, especially for those who prefer a guided approach.

Model portfolios work by grouping a selection of investments into pre-defined portfolios based on varying levels of risk. Investment managers adjust the asset allocation according to market conditions and the portfolio’s target risk profile. Investors choose a model that matches their financial goals and risk tolerance, typically with the guidance of a financial adviser.

Model Portfolio Services offer a number of key benefits. They provide diversification, helping to spread risk across a broad range of asset types. Portfolios are under professional management, meaning experienced investment teams monitor and adjust holdings to stay in line with market conditions and risk targets. Each portfolio is designed to meet a specific risk level, often using a recognised scale such as Defaqto’s, making it easier for investors to choose an option suited to their needs. The service also offers efficiency, saving time and effort compared to managing investments independently. Finally, there is a high degree of transparency, with regular updates and factsheets available to help investors understand how their portfolio is performing and what it contains.

Model Portfolio Services are ideal for investors who want a hands-off approach but still want professional oversight. They suit a wide range of investors, from cautious savers to more adventurous investors. It is important to work with a financial adviser to select a model portfolio that aligns with your personal goals, time horizon, and risk appetite.

Risk is managed through strategic diversification and regular portfolio rebalancing. Most services use a risk rating system, such as Defaqto’s 1 to 10 scale, to help investors understand the relative risk level of each portfolio. By choosing a portfolio aligned to your risk tolerance, you can invest confidently knowing your investments are structured to handle different market conditions.