How to prioritize goals and expenses

Enabled for all users

Our latest release of AdviserGo includes a major redesign of how goals and expenses are prioritized in client plans. The various types of goals and expenses have been decoupled from their prioritization, giving advisers and their clients complete flexibility to prioritize and importantly, to reprioritize goals at any time, without the need to delete and reenter any information.

Expense Categories Simplified and Prioritization decoupled from the type of Expense

Some categories of expenses, such as Basics, Leisure, and Luxury, related to their priority, with Basics being the highest priority. The Milestone expense type, on the other hand, related to its timing, with a milestone being a one-off expense or goal. Other special types of types of expenses, such as Education (university costs) or Legacy (gifting and charitable giving), related to special rules or features. All in all, this list was a lot to parse when entering expenses.

With expense refactoring, there is now much less to parse visually and conceptually when entering expenses. Menu options have been simplified and narrowed down to four options:

  • Recurring “Multi Year” expenses. Expenses recur starting and ending with a pair of events selected on the Timing tab.

Note – Expenses (and goals) can also be scheduled as recurring lump sum expenditures using the special Expense Frequency setting on the Timing tab – e.g., car purchases can be scheduled to recur ever five years from now until retirement.

  • One-off “Single Year” expenses.
  • The special Legacy expense type remains as an option for scheduling future gifts and chartable giving.
  • The University expense type remains available to create, automatically, university start and graduation events for the expense owner. In some jurisdictions, such as Canada and the US, University expenses are also designed to take qualified withdrawals from special education savings accounts such as RESPs in Canada and 529 and Coverdale plans in the United States.

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The types of expenditure (multiyear, single year, education, and legacy) are indicated on the Dashboard.

 

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Once you select the appropriate expense type, you will find for all types a new prioritization slider. This slider will allow for expenses and goals to be reviewed and reprioritized at any time, at any point in the planning process, unlike today, where priority is determined based on the type of expense you are entering and cannot later be changed.

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This slider can be used at any time for any type of expense or goal to review and possibly change its priority.

The priority slider has calibration points beneath each priority level, allowing you to set an expense or goal by broader level, as a basic (high), leisure (medium), or luxury (low) level goal overall.

Within these three broad priority levels, you also have the option to further specify whether a basic expense, for example, is a high, medium, or low-level essential expenditure. The software will then follow prioritization as it fulfills future annual expenditure.

Note, Custom Priority Levels – The prioritization slider has been designed with customization in mind. The names of expense priorities could be customized for enterprises, aligning them with the terminology you use when discussing goals with your clients.

Goal Prioritization

Goal types, which have always been more succinct than expenses, remain unchanged. Retirement, Pre-Retirement, and Milestone goal types all have an eye to their default timing, whereas Education goals is a special goal type intended, at least in part, to take qualified withdrawals from special education savings accounts such as RESPs in Canada and 529 and Coverdale plans in the United States.

  • Pre-Retirement” goals are assumed, at least initially on the Timing tab, to be a recurring expenditure from the plan’s Start until the first Retirement event. The selection of this pair of events is merely suggested timing for your convenience. Alternative start and end events can be selected on the Timing tab.
  • Retirement” goals are assumed, at least initially on the Timing tab, to be a recurring expenditure from the first Retirement event until the last Mortality event. The selection of this pair of events is merely suggested timing for your convenience. Alternative start and end events can be selected on the Timing tab.

Note – Goals (and expenses) can also be scheduled as recurring lump sum expenditures using the special Expense Frequency setting on the Timing tab – e.g., car purchases can be scheduled to recur ever five years from now until retirement.

  • A “Milestone” is a one-off, single year expenditure and as such, retires the selection of a single event. One could (hopefully) assume a child’s wedding would be a Milestone goal.
  • The Education goal creates, automatically, university start and graduation events for the goal’s owner. In some jurisdictions, such as Canada and the US, Education goals (and University expenses) are also designed to take qualified withdrawals from special education savings accounts such as RESPs in Canada and 529 and Coverdale plans in the United States.

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Like expenses, once you select the appropriate type of goal, you will find for all goal types a new prioritization slider. This slider will allow for goals and expenses to be reviewed and reprioritized at any time, at any point in the planning process. 

 

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This slider can be used at any time for any type of goal or expense to review and possibly change its priority.

The priority slider has calibration points beneath each priority level, allowing you to set an goal or expenses by broader level, as a basic (high), leisure (medium), or luxury (low) level goal overall.

Within these three broad priority levels, you also have the option to further specify whether a basic expense, for example, is a high, medium, or low-level essential expenditure. The software will then follow prioritization as it fulfills future annual expenditure.

Note, Custom Priority Levels – The prioritization slider has been designed with customization in mind. The names of goal priorities could be customized for enterprises, aligning them with the terminology you use when discussing goals with your clients.