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Practice Building Made Easier with Advanced Portfolio Projection Models

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With OPAL's Goals-Based Planning Solution, we aim to translate client’s financial goals into an optimal investment strategy reflecting their personal ambitions, cash flows and risk appetite. Additionally, Ortec’s solution links investment portfolios to financial goals and tracks the progress over time on a daily basis, based on actual portfolio values...

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by Ortec Finance
| 20/06/2022 11:54:28

With volatile capital markets and client portfolios significantly impacted by COVID-19, the stakes are higher for advisors. Clients are demanding clarity and higher levels of service. Luckily, technology can help.

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:

  1. 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.
  2. 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.
  3. 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.

Read the original article here.