Model Portfolios vs. Goals-Based Investing: The Case for Reverse Engineering Your Wealth
If you’ve ever been told you’re a “60/40 investor,” you’ve been put in a box. Not a portfolio—a box.
The financial industry loves pre-set allocation models because they’re easy to scale, easy to sell, and easy to defend. Fill out a 10-question risk survey, get slotted into a model, and congratulations—you’re now the same as thousands of other people.
The dirty little secret? These models are almost always back-tested. They’re built by looking at historical returns and asking, “How would this mix of stocks and bonds have done in the past?” Then they’re stamped as the solution for the future.
But history doesn’t repeat perfectly. Interest rates, taxes, global risks, technology—none of these line up neatly with the past.
Why Firms Push Models
So why do large firms keep pushing these allocation models? One word: scale.
When a firm has thousands of clients, it’s impossible to tailor portfolios to each individual. The model becomes the product. It’s efficient for the firm, but it ignores you.
Scale says: “How do we make one portfolio work for a thousand (or a million) investors?”
Clients say: “How do I know my money will fund my life?”
Those are two very different questions. The industry chooses scale every time—because it serves their bottom line, not yours.
Why Models Fail Affluent Investors
If you have $2 million, $10 million, or $20 million, you already know your financial life is too complex to fit into a cookie-cutter model. Here’s what they ignore:
Timing: Retiring at the top of the market vs. the bottom can change everything.
Taxes: Roth conversions, charitable strategies, and SALT deduction phaseouts aren’t part of a model.
Assumptions That Don’t Hold: The assumptions baked into most models—steady average returns, predictable correlations, “normal” volatility—sound reassuring until markets break those rules. In times of stress, diversification doesn’t always protect, and “average” returns don’t help if you’re pulling money out in a down year.
Reverse Engineering: A Smarter Way
I started my career after being recruited from Nordstrom. One thing I learned early: there’s a world of difference between off-the-rack and tailored. Off-the-rack clothing might be fine for the masses, but when it comes to something that matters—your wedding suit, your career wardrobe—you want something made for you.
The same applies to your wealth. Pre-set allocation models are the off-the-rack suit of investing. They’re designed to fit everyone—and in doing so, they fit no one particularly well.
At Sevey Wealth, we believe in tailoring. We reverse engineer your allocation around your actual goals:
Retirement income: Structuring portfolios to provide steady spending without forcing you to sell in down markets.
Medicare bridging: Covering the healthcare gap before age 65, so costs don’t derail your retirement.
Family milestones: Whether it’s funding a wedding, paying for a grandchild’s education, or taking the whole family to Africa—your money should be aligned with those experiences.
Legacy and protection: Supporting a special needs child for life, creating a charitable impact, or passing wealth with intention.
Every dollar should have a purpose. Not “balanced” for an imaginary average investor, but tailored to the life you’re living.
The Emotional Shift
Benchmarks and model portfolios push you to focus on an arbitrary number—an “average return” or how you compared to the S&P 500. But those numbers don’t tell you if you can retire when you want, cover healthcare before Medicare, or take your family on the trip of a lifetime.
The real measure of success isn’t beating a benchmark—it’s whether your wealth is aligned with your life. Goals-based investing shifts the question from “What did my portfolio return?” to “Is my money set up to fund the things that matter most to me?”
Ask Yourself This
If you’re in a 60/40, 70/30, or 80/20 portfolio today, ask yourself:
Is this allocation built for my future—or just back-tested on someone else’s past?
Is my advisor designing around my goals—or just plugging me into a model that scales well for their firm?
If you don’t like the answer, that’s the real risk in your portfolio.
Final Thought
We believe affluent families deserve more than yesterday’s back-tested models. If your wealth was built outside the box, it shouldn’t be managed inside one.
At Sevey Wealth, we reverse engineer your allocation so your money funds what matters most—your goals, your way.
📅 Next Step: Reply back and let’s see if your current portfolio is serving you, or just serving the firm that sold it.
