Where do I find where on the platform to generate an Investment Plan proposal?
Within the Contacts tab in the view of any household, client, account or prospect, click on the Actions dropdown upper right and select Generate Proposal.
What is the difference between Investment Plan proposal types?
- Complete the risk tolerance questionnaire (RTQ) and choose a model. Can only invest in one account.
- No RTQ. Choose one model and invest in one account.
- No RTQ. Choose multiple models and invest in one or more accounts, or choose one model and invest in multiple accounts, or do both.
Are advisor-built models available on Investment Plan proposal path 1?
Yes. Advisor-built models are on all 3 Investment Plan proposal types.
When creating an Investment Plan proposal with current vs proposed comparison, will I be able to upload a spreadsheet of securities instead of manually entering holdings?
This will be a future enhancement.
How do I run some sample/hypo investment plans?
Sample/hypo investment plans can be created but there must be a client or prospect record created to store these proposals and find them in the future. We have stored for your use a sample Investment Plan proposal in the Resource Center.
What if I want to see plans created previously?
History of plans completed and in process appear on the main page of the Investment Plan tool accessed by clicking “Generate Proposal” upper right in the Contacts tab on any page that is a view of a household, client, account, or prospect.
Is there a way to self-identify risk tolerance for Investment Plan paths 2 and 3?
The selection of the investment model is the advisor self-identifying risk tolerance. A future enhancement will be an explicit risk category selection.
Where do we input client’s risk tolerance to exclude models that do not fit the risk tolerance?
The Investment Plan path 1 includes a risk tolerance questionnaire resulting in a risk score. You are then presented with the option to accept the risk category or go up or down one risk category. Once the risk category is selected, the only model choices that will appear in the next section are those in that risk category.
Can we establish guardrails for model selection based on the client’s risk tolerance? How do I ensure I am choosing an appropriate model by risk score?
Investment Plan path 1 results in an assigned risk category and you can only go up or down one risk category. In paths 2 and 3 you determine the risk score by model selection. The Model Center has a column for risk tolerance. If the risk score is “N/A,” then it does not have a risk score assigned and should not be used as a standalone model. The Investment Plan paths 2 and 3 allow you to select whatever model(s) you choose and the presentation of your selection(s) in the Investment Plan proposal represent the selected risk category.
Is there a way to email the risk tolerance questionnaire to a client?
A PDF version is in the Resource Center.
Can I email to the client a link to an Investment Plan proposal?
You can upload the Investment Plan proposal(s) into the client’s Documents vault and the client can view it there, or you can share it interactively on a virtual meeting.
On Investment Plan proposal path 1 where does the sample return/risk come from?
The statistics presented for each risk category are sourced from Morningstar. A guide on this will be available in the Resource Center. As a future enhancement we will pursue ways to make the Select Risk Profile screen more informative.
Under the Investments section on the Investment Plan proposal PDF output, is listed every holding in each SMA, which generates many pages. Could we shorten this to show only the asset allocation to each SMA within the model?
This list of holdings is not required. Simply uncheck on the output setup page.
In the Historical Risk/Return Analysis section of the proposal output PDF, the S&P 500 seems to be a default included – is that removable or customizable to include a different benchmark?
For the first two proposal types it is not removable or customizable. In the third proposal type you are able to choose the benchmark.
It would be good to be able to input several benchmarks that actually reflect the construct of the portfolio. I find that a blended benchmark is the most meaningful and honest comparison.
The system will always compare against 2 benchmarks, the assigned benchmark of the model and the S&P 500 TR. The S&P 500 may not always be the most appropriate benchmark; however, it is included as it is recognizable by the average investor. When you are creating an Investment Plan and two or more models are being used, the system will blend the assigned benchmarks of both models. This is a different paradigm from how Advisory World does it where a blended benchmark is assigned at the model level.
Will we be able to have multiple benchmarks to compare current portfolios to proposed models?
Yes. Each model will be compared to a Morningstar benchmark and the S&P 500 TR. When creating a proposal using the third proposal type you have the option to choose a secondary benchmark.
Will we be able to show fees with the new system? Will the fees be shown as a systematic withdrawal, the way we have been “mimicking” fees and showing them with Advisory World? Also, will there be a way to show fees on existing accounts?
The Freedom Platform Fee will be disclosed in the Investment Plan and Advisory Fee disclosed in the Freedom Investment Management Agreement. The client’s monthly performance and billing report will present the specific fees charged in the month for the Freedom Platform Fee, Advisory Fee and Investment Management Fee.
The risk tolerance questionnaire (RTQ) looks like it is designed for when the advisor is meeting with the client and is able to ask the questions right then and there.
All RTQs are, of course, intended for client-advisor engagement where the client ultimately gives the answers. In the scenario where an advisor has already established a client’s risk tolerance using some other RTQ, then the advisor bypasses the first path that includes the RTQ and takes one of the other 2 paths. The advisor chooses the model(s) by the risk profile that suits the client’s risk tolerance.
Would we be able to get a “key” for us to be able to know which answers result in which risk tolerance? In case the advisor lets us know the risk tolerance without the answers to the questionnaire.
This RTQ has a very complicated, sophisticated, proprietary algorithm that determines the risk tolerance. A simple guide to the RTQ scoring is available in the Resource Center.
Add Monte Carlo simulation.
The bell curve chart is the alternative to Monte Carlo simulation. We will evaluate the need for Monte Carlo in 2022 with advisor feedback.
Will there be a default benchmark in Investment Plan proposals?
The model will always be tied to a Morningstar benchmark. The default secondary benchmark is set to the S&P 500 TR.