WealthPlan is “a cloud-based adviser-driven robo-planner solution, that is based on over 10 years of experience in providing advisers with financial planning technology,” chief investment officer Michael Lang says.
Unlike most robo-advisers, NZ Funds’ technology is specifically designed for clients with substantial wealth where the role of the adviser is an integral part of the proposition.
“Ten years ago we were sitting in client meetings trying to help them understand the merits of sticking with an investment portfolio which had just dropped in value. These clients quite reasonably asked, “where might I be in 12 years if I stick with my portfolio and continue regularly saving?””
“If the client had only asked how much a static portfolio would grow by, we could have estimated the outcome using the rule of 72 or a calculator. However, clients were also asking us to take future regular savings programmes into account, so the 12C calculator went out the window. You needed an Excel spreadsheet.
“What many clients were really wanting to discuss was how their endgame would be affected by choosing different allocations to higher-expected return assets, like local and international shares or adopting different savings rates. They wanted to understand the trade-offs between volatility and future expected returns and between current expenditure and future net worth.”
The new software is capable of illustrating the consequences of making different financial decisions.
NZ Funds provided advisers plan writing for many years. Lang says more than 60 independent financial advisory firms, have written more than 12,400 financial plans and has helped them make investment recommendations on over a $1 billion worth of assets.
“But the statistics we are proudest of are that more than two thirds of our clients have a full financial plan generated by the software, and the software has been a key factor in our average client tenure increasing by 33% from 9 years to 12 years since December 2011.”
Lang says the latest piece of fintech, WealthPlan, has been almost three years in the making. It is designed to enable advisers to write different types of plans, with plans underway to add straight-through processing and sign-on fulfilment.
WealthPlan has been designed to cover saving for retirement, spending in retirement, one or multiple KiwiSaver plans, UK Pension transfers, standalone investment portfolios, trusts, charities and much more.
WealthPlan also enables an adviser to perform a review of another advisers’ portfolio, highlighting its strengths and weaknesses. It can also stress test a portfolio for different market events, such as the 1987 share market crash, tech boom and subsequent bust in 2000 or 2009 Global Financial Crisis.
Lang says fintech tools developed in places like the United States are available in New Zealand, however local investors have different behaviour and experiences to other countries.
WealthPlan algorithms are based on New Zealand data.
“We believes this will provide a moat against American and Australian designed algorithms,” Lang says.
“Many commentators think fin-tech will disrupt the advice industry by replacing financial advisers with a piece of software. We think about it differently. We see fin-tech as a tool that enables advisers to build better portfolios and helps them illustrate the merit of what they are recommending to clients.”
“In that process the adviser is still the primary point of contact and is an essential component of the client’s long-term success.”
| « Regan: AMP's conduct unacceptable | Mann on a mission to diversify financial advice » |
Special Offers
No comments yet
Sign In to add your comment
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved