The Asset Allocation components of Planit are recognized in the industry as one of the most dynamic in any planning software available. Our asset classes are based on feedback from individual and corporate users and also based on research and a study of trends in the industry.
New with version 5.3.8 we have updated the Asset Classes, Historical Returns and Portfolios (For Sites Using Core Asset Classes)
- Asset Classes – We have made two changes to the asset classes that are based on feedback from individual and corporate users and also based on research and a study of trends in the industry. The two changes consist of removing the Special Income class and adding a new class, Emerging Markets.
- Historical Returns – Also with this update we will incorporate the 2010 performance numbers for each asset class.
- Portfolios – Lastly we are making changes to the target portfolios. We have changed all of the names of the portfolios and have gone from five portfolios to 7 portfolios with this new update.
- When you have inputted your assets at a summary level, 100% of the current investments are assumed to be in “cash” since it’s impossible for the software to know what the actual allocation is. You then have the option to manually identify the actual allocation under each asset class by merely typing in the percentages or the amounts, this depends how you have the “Edit By” set at.
- With detailed level asset information, the current portfolio will be based on the asset allocation of the assets input.
- This is a good investment of your time and effort since you want the comparison between the Current and the Target portfolio to be meaningful both here on the screen, IPS document and also the effects the retirement projection in the Personal Financial Strategy document.
- The Recommended and the Target portfolio percentages are determined when the asset allocation screen is first opened based on the responses to the Risk Profile questionnaire, thus the two columns will initially be the same.
- You have the option to change the target portfolio to be different from the recommended portfolio. Change by selecting a new portfolio from the drop down menu.
- If the “Custom” portfolio option is available, you are able to select your own weightings as opposed to having a standard portfolio being used.
- The screen will always display a comparison between Current and Target portfolio Rate of Return, Standard Deviation and Sharpe Ratio.
- When you are satisfied with the target portfolio illustrated, click on the “Next” arrow icon to proceed.
TIP: Sometimes you may feel the returns may be too high, if this is the case then you can reduce the returns. By using the drop down menu beside the field “Return Reduction” you can reduce the returns by many different percentages. Please keep in mind that the PlanPlus Planit is populated with historical indices data for all asset classes and our goal is to retain data for a 40-year period.
NEW on the Asset Allocation screen you’ll notice a new drop down list called “Portfolios” where you can select the portfolio you wish to view. In the example below you’ll see that you can discretely look at the current asset allocation and the target asset allocation for each portfolio. You can also override the recommended investment profile and select an alternative. When you do this, the screen will refresh and display the Recommended Profile above the Selected Profile so you can clearly see that you have elected to choose your own target, or set a custom one.
Having this ability to build portfolios with unique asset allocation targets, based on the investment objectives and goals associated with each portfolio is a powerful feature that allows you to make recommendations that are truly suitable to the needs of your clients.
And finally you can choose to see a view of “All Portfolios” which presents a consolidated view of the Current and Target asset allocation for all of your portfolios rolled up.
This will allow you to see the overall asset allocation for all of the family’s investments and the projected returns and risk associated with the consolidated portfolio. It will be this consolidated return assumption that will be used in the long term projections in the 5.2 version.
As we move forward, it is our intention to extend the functionality of these “Portfolios” and be able to incorporate in the unique return assumptions associated with each into the long term projections. This is expected to be available later in 2010.
Mini Movies which answer very frequently asked questions on Asset Allocation Screen
‘Why do asset classes in the eLearning modules appear to be different than the ones I see on my screen?’: |Length: 0min 48 sec
‘Where do PlanPlus rates of return come from and how are they calculated?’: |Length: 5min 03 sec
‘How is the risk of a portfolio calculated?’: |Length: 1min 59 sec