In addition to helping advisers grow their practices in a sustainable and scalable manner, technology can give them back another precious commodity: time. But efficiencies can sometimes be achieved where you would least expect. Portfolio projections powered by Economic Scenario Generators (ESG) represent a breakthrough improvement over models driven by Monte Carlo simulations, as we discussed in our previous article. An automated, ESG-driven institutional-quality portfolio projection and risk management platform represents a key competitive advantage and business-building resource for advisers.
Automating away time-consuming portfolio tasks
Being able to provide a sophisticated analysis of risk-return scenarios for clients offers a clearer line of sight into a client's goals, no matter what the market brings. Benefits include:
- Enhanced value-added service: adviser practices are under considerable competitive pressure amid current economic and market conditions. At the same time, clients are willing to pay fees for high levels of service. A 2019 EY survey of advisers’ clients indicated that investors were willing to pay for quality financial advice and planning. An ESG-driven platform can provide that enhanced level of service to help acquire, grow and retain clients.
- Scalability: an automated portfolio projection platform can help a practice grow without a commensurate increase in costs and/or working hours. This empowers advisers to manage a large number of client relationships and efficiently identify which clients are offside relative to their short, medium and long-term goals.
- Portfolio monitoring: there is an old adviser adage that says that the moment you print a financial plan, it dies. An advanced ESG-powered portfolio projection platform is not only a tool for creating a financial plan, it continues to monitor and follow up on that plan, and nimbly generates options for course corrections that may be needed.
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