Vanguard has introduced Custom Model Portfolios, a new offering that lets financial advisors tailor the firm's existing multi-asset and single-asset-class models to better suit individual client needs. The launch comes as advisors increasingly seek personalization in portfolio construction, a trend underscored by Morningstar's US Model Portfolio Landscape report, which showed assets in third-party model portfolios reached $943 billion as of March 31, 2026, a 46% year-over-year increase.
Custom models specifically attracted $258 billion of that total, up 40% from the prior year. The new Vanguard offering aims to capture a slice of that growth by providing a middle ground between fully outsourced models and the labor-intensive process of building bespoke allocations from scratch.
Amma Boateng, managing director of Vanguard's Financial Advisor Services, said in a statement that the Custom Model Portfolios leverage Vanguard's decades of experience managing multi-asset portfolios to help advisors scale portfolio management while retaining control over key investment choices. The Malvern, Pennsylvania-based firm's investment team constructs and maintains the underlying models, while advisors layer on their own modifications to accommodate client preferences around specific products, asset classes, or management styles—whether active, passive, or a blend.
Vanguard's own research indicates that model portfolios can reduce the time advisors spend on portfolio construction by approximately two-thirds, freeing capacity for client relationships and business development. The cost structure remains true to Vanguard's value proposition: the firm's model portfolios carry a weighted average expense ratio of approximately 0.07%, compared with an industry average of roughly 0.40%, according to Morningstar data as of February 2026.
The Custom Model Portfolios are available through integrations with three portfolio management platforms: Vestmark, SS&C Black Diamond Wealth Solutions, and Orion. Each supports trading, rebalancing, and tax management functions, with the Vestmark integration specifically tailored for RIAs. This tech stack is part of a broader push by Vanguard into model portfolios, which has accelerated in 2026.
In May, Vanguard launched its Dynamic Active-Passive Model Portfolio series, offering seven risk-based configurations ranging from fixed-income-only to 100% equity, after adding active ETFs to its model lineup as advisor demand for blended strategies grew. The move aligns with broader industry trends, as active ETFs dominate 2025 launches and RIAs drive record flows into these products.
The new custom models also reflect a shift toward more flexible portfolio solutions, similar to LPL Research's 17 modular models, which have helped push its platform AUM above $100 billion. As advisors seek to differentiate their practices, the ability to customize model portfolios without sacrificing efficiency is becoming a key competitive advantage.
Industry observers note that the rise of custom models is part of a larger movement toward personalization in wealth management, driven by client expectations and technological advancements. Ambient AI, not smarter models, will define wealth tech's next decade, according to Advisor360's CEO, suggesting that the integration of technology and human advice will be crucial.
Vanguard's entry into the custom model space is likely to intensify competition among asset managers, as they vie for advisor attention in a market where model portfolios are becoming a standard tool. With expense ratios at a fraction of the industry average, Vanguard is positioning itself as a cost-effective option for advisors who want to maintain control over client allocations while leveraging the firm's investment expertise.
