Loss Capacity Insight Transcript
Hello, and welcome to today’s AdviserGo training.
Today, we’re going to walk through Voyant’s Loss Capacity Insight.
This is a helpful insight for stress testing your client’s plan. It estimates how much the client’s invested assets could lose while still allowing the plan to achieve its goals.
This can be useful when determining how susceptible a plan may be to a major loss event.
At the bottom left of the insight screen, you’ll see the Loss Event option. This allows you to choose when the loss event should occur. You can edit this and select any event marker that exists in the plan.
For this example, I’m going to keep the loss event set to Peter’s retirement at age 65.
We want to answer the question: if a major loss occurred when Peter turns 65, how much could this plan afford to lose and still remain successful?
Now, let’s run the simulation.
The insight result gives us an estimated loss rate of 32.75%. This equals a loss amount of approximately 21.6 million Malaysian ringgit.
From here, we can compare the insight results against the original plan.
In the insight result, we can see that there is no projected shortfall. The clients’ needs are still being met, even after applying this major loss to the plan.
To better understand the impact, let’s switch to the Assets chart.
Here, we can compare the asset values between the original plan and the insight scenario. The insight result is shown on the top, which includes the major loss event.
In this side-by-side comparison, we can see a significant difference in projected asset values. In one year, the insight result shows approximately 37.3 million, compared to 81.3 million in the original plan.
This helps illustrate how the major loss would affect the client’s assets over time.
Now, if we move to the end of the plan, we can see what would be left after the loss event occurs.
In the insight scenario, the clients are primarily left with the main residence by the end of the plan.
So while the clients are still able to meet their laid-out goals, the major loss event would result in a significantly smaller legacy at the end of the plan.
The Loss Capacity Insight is a helpful way to show how much market loss a plan could withstand while still meeting the client’s goals. It can also support conversations around risk tolerance, asset allocation, and the potential long-term impact of a major downturn.
If you have any questions, you can request support directly from within the client case. Click the client’s name in the top-right corner, select Request Support, enter your question in the text box, and share client access.
Thanks for listening.