The option to set a default Asset Allocation (i.e. model portfolio) has been added to the Plan Settings in AdviserGo.
Previously, the default asset allocation in AdviserGo was set to 100% Cash. Alternative asset allocations had to be selected for investments individually, on an account-by-account basis, which meant more work when setting up plans to reflect your client’s investment mix more accurately.
Now not only can a default asset allocation be set for a client case in the client’s Base Plan, this default portfolio can also be adjusted in subsequent what-if scenarios, allowing you to compare the results of one model asset allocation, perhaps a more aggressive portfolio, against another that has less risk and less potential downside, in two otherwise identical plans. You might then run the Historic, Monte Carlo, or Market Crash insights to illustrate the element of risk in the two plans.
The Plan Settings are accessed via the bottommost link in the center of the Dashboard screen, as pictured below.
On the Plan Settings screen you will find a new tab for Asset Allocation. When selected, you can re-allocate percentages amongst the asset classes provided.
The asset classes shown are set in the software’s underlying market assumptions, which may be customised with your own data set and asset classes via a rebrand of the software.
In many cases the number of available asset classes exceed those that can be displayed on this panel. The left-right arrows beneath the asset classes will allow you to scroll over to additional asset classes.
Whichever the asset mix you select, it must result in 100% allocated custom portfolio, as indicated top-right on the panel.
Firms that have a rebrand of the software have the option to load preset model portfolios into their rebranded versions of AdviserGo. If your firm’s rebrand of AdviserGo includes model portfolios, these can be used as defaults in the Plan Settings in addition to being applied to investment and retirement accounts individually. If model portfolios are available, the option to “Click here” will appear beneath the asset allocation.
Once clicked, the adjacent slider will be activated allowing you to select a model portfolio.
The Asset Allocation plan setting is used as the initial default investment portfolio for any investment or retirement account that is set to be grown using a Portfolio rather than an Entered [Fixed] Growth Rate, as pictured below.
Note - The default asset allocation for cash accounts such as savings or chequing accounts, is assumed to be a 100% Cash allocation.
The default Asset Allocation is used only to set the portfolio that is shown initially for investments and retirement accounts on the Growth > Portfolio tab, as pictured below. If you set an account to be grown using a portfolio, then this default asset allocation will be used to derive a growth rate for the account using the software's underlying market assumptions and based on the percentages allocated to the various assets in the portfolio.
While preferences do provide system's initial defaults, if you enter or select an alternative portfolio for a specific investment in a plan, this alternative asset allocation will override the default allocation for that account. In general, growth rates, inflation rates, and other settings, when edited at the item-specific level in a plan, will override the initial Plan Settings (defaults) and once edited, they stay edited at the item level.
Why asset allocations?
Asset allocations provide a range of possible returns – a 50th percentile mean together with a maximum upside and downside – that a fixed growth rate cannot. Some features in the software require at least some investments to be grown using asset allocations if they are to be used. These features include the Monte Carlo and Historic insights as well as the Asset Allocation overview, displayed the lower-right corner of the Dashboard.