Following a fact find, a financial adviser recommended that their client should use a model...

A fettered fund of funds structure restricts fund selection to a limited list, commonly the provider’s own funds or a pre-approved panel. When a model portfolio is implemented using this approach, the adviser gains operational simplicity and a consistent investment process, but the main drawback is reduced choice. Limiting the investable universe can prevent access to best-in-class external managers, specialist strategies, or lower-cost alternatives, and it may also reduce flexibility when switching is desirable due to manager underperformance, style drift, or changes in market conditions. This restriction is the defining disadvantage of a fettered approach and is a frequent exam point because it links directly to product governance, value for money, and the management of potential conflicts. Option A is generally incorrect because most model portfolio solutions allow additional contributions. Option C is not a necessary consequence; volatility depends on the portfolio’s asset allocation and underlying funds, not on whether the range is fettered. Option D is irrelevant because corporate actions are primarily an issue for direct securities holdings, not diversified funds within a fund of funds structure.