Planit:Asset Allocation Case Study

From Planipedia

The main function of the Investment Policy process flow is to produce an Investment Policy Statement (IPS) for your client that clearly outlines their current investment behaviour, and how they can benefit from implementing a new investment strategy with the help of an advisor.

Country Specific

Canada English

=== Example Problem One: === David and Debbie have an “Aggressive risk profile” and their current asset allocation is: 25% cash, 40% fixed income and 35% equities. Contents 1 Solution using Risk Profiling and Asset Allocation: 2 Solution using Risk Profiling and Asset Allocation: 3 Solution using Risk Profiling and Asset Allocation: 4 Solution using Risk Profiling and Asset Allocation: Solution using Risk Profiling and Asset Allocation: Once on the Risk Profile screen, respond to the questions to get an Aggressive Risk Profile. TIP: click on the Help link on the menu bar to see a breakdown of how each question is scored and how this maps into the different risk profiles if you are having difficulty. Once complete, click on the Next arrow to proceed to the Asset Allocation screen. On the Asset Allocation screen, there are now editable fields under the Current Portfolio section. 1. Change the Cash field from the default of 100% to 25%. 2. Change the Fixed Income field to 40% 3. Change the Equities field to 35% Since the Target Portfolio has already been recommended based on the client’s risk profile, and there are no constraints on the portfolio, the target allocation does not need to be changed. 4. Click Calculate at the bottom of the screen to save the information and calculate the new rate of return, etc.

United States of America
{{{United States Workbook Template}}}

Argentina
{{{Argentina Workbook Template}}}

Brazil
{{{Brazil Workbook Template}}}

United Kingdom

=== Example Problem One: === David and Debbie O'Connell have an “Aggressive risk profile” and their current asset allocation is: 20% cash, 30% fixed income and 10% equities. Solution using Risk Profiling and Asset Allocation: Once on the Risk Profile screen, respond to the questions to get an Aggressive Risk Profile. TIP: click on the Help link on the menu bar to see a breakdown of how each question is scored and how this maps into the different risk profiles if you are having difficulty. Once complete, click on the Next arrow to proceed to the Asset Allocation screen. On the Asset Allocation screen, there are now editable fields under the Current Portfolio section. 1. Change the cash field from the default of 100% to 20%. 2. Change the Fixed Income field to 30% 3. Change the Global Property field to 10% Since the Target Portfolio has already been recommended based on the client’s risk profile, and there are no constraints on the portfolio, the target allocation does not need to be changed. 4. Click Calculate at the bottom of the screen to save the information and calculate the new rate of return, etc.

Russia
{{{Russia Workbook Template}}}

China
{{{China Workbook Template}}}

Malaysia

=== Example Problem One: === Ahmad Osman and Aisyah Musa have an “Aggressive risk profile” and their current asset allocation is: 25% cash, 40% fixed income and 35% equities. Solution using Risk Profiling and Asset Allocation: Once on the Risk Profile screen, respond to the questions to get an Aggressive Risk Profile. TIP: click on the Help link on the menu bar to see a breakdown of how each question is scored and how this maps into the different risk profiles if you are having difficulty. Once complete, click on the Next arrow to proceed to the Asset Allocation screen. On the Asset Allocation screen, there are now editable fields under the Current Portfolio section. 1. Change the cash field from the default of 100% to 25%. 2. Change the Fixed Income field to 40% 3. Change the Malaysian equities field to 35% Since the Target Portfolio has already been recommended based on the client’s risk profile, and there are no constraints on the portfolio, the target allocation does not need to be changed. 4. Click Calculate at the bottom of the screen to save the information and calculate the new rate of return, etc.

Singapore

=== Example Problem One: === James and May Wang have an “Aggressive risk profile” and their current asset allocation is: 25% cash, 40% fixed income and 35% equities. Solution using Risk Profiling and Asset Allocation: Once on the Risk Profile screen, respond to the questions to get an Aggressive Risk Profile. TIP: click on the Help link on the menu bar to see a breakdown of how each question is scored and how this maps into the different risk profiles if you are having difficulty. Once complete, click on the Next arrow to proceed to the Asset Allocation screen. On the Asset Allocation screen, there are now editable fields under the Current Portfolio section. 1. Change the cash field from the default of 100% to 25%. 2. Change the Fixed Income field to 40% 3. Change the Singapore equities field to 35% Since the Target Portfolio has already been recommended based on the client’s risk profile, and there are no constraints on the portfolio, the target allocation does not need to be changed. 4. Click Calculate at the bottom of the screen to save the information and calculate the new rate of return, etc.

Hong Kong
{{{Hong Kong Workbook Template}}}

India
{{{India Workbook Template}}}

Caribbean
Jamaica {{{Jamaica Workbook Template}}} Trinidad and Tobago {{{Trinidad and Tobago Workbook Template}}} Barbados {{{Barbados Workbook Template}}} Bermuda {{{Bermuda Workbook Template}}} Bahamas {{{Bahamas Workbook Template}}} Puerto Rico {{{Puerto Rico Workbook Template}}}

Go to the exercise to test your knowledge on recommending a target asset allocation for your client.