A model portfolio is a preset mix of investments that an advisor or outside manager uses as a template for many clients' accounts, adjusted for each person's goals and risk.
Many advisors run a handful of models, from conservative to aggressive, and rebalance each client's account back toward its model. It keeps accounts consistent and makes trading efficient. The models can be built in-house, licensed from a fund company, or run by a TAMP.
SEC rules for managed account programs expect each account to be managed for that client's financial situation and objectives, with the chance to impose reasonable restrictions. A model shouldn't override what's specific to you, such as where your taxable and retirement money sits.
Two things to ask: whether the model favors the firm's own or affiliated funds, which Form CRS lists as a conflict, and the weighted expense ratio of the funds in it, which you pay on top of the advisor's fee.
How to check
Read Item 8 (Methods of Analysis, Investment Strategies and Risk of Loss) and Item 4 of the firm's Form ADV Part 2A brochure, and ask for the model's holdings and their expense ratios.
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