Due to the lack of a standardized offering, it is somewhat difficult for me to describe exactly how an independent RIA would use Perspective Partners software, since each reader might end up with a somewhat different version. However, the example that follows should give readers a sense of what Perspective Partners might do for them.
I tried out a "lite" implementation of the platform, one that is currently being used by reps at an insurance company. Other firms, including Manning and Napier, use "extended" versions of the program offering more sophisticated risk assessments, inputs and outputs, as well as additional workflow "steps" (such as a step to prequalify prospects).
I participated in a number of online demonstrations of this "lite" version, and then I tried it out for myself. When advisors enter the program, the first thing they see upon logging in is an "advisor dashboard." The dashboard serves two purposes. First, it allows the advisor to view a snapshot of where all clients are in the planning process. In this case, the process includes only two main steps; those using "extended" versions of Perspective Partners tools will employ a three-, four- or five-step process. The "steps" are color coded. Initially, each step is highlighted in red, indicating that action is required. Once a step is performed, the color changes to green, indicating completion. The net result is that the program provides a guided workflow. Within each step, buttons guide the advisor through the screens that each step is comprised of.
The dashboard's other function is to provide access to additional program features. New contacts can be added either by typing in the required information at the left of the screen, or by importing a list in a commonly used data format.
Under the contact entry screen is a hotlink labeled "Generate Sales Handouts," which could probably use a change in nomenclature. Here, advisors can access two generic educational reports for clients. Access to a standalone suitability questionnaire is provided here as well. Like much of the platform, these materials are customizable, so they can be geared to the sophistication level of both the advisor and the target audience. In this version, the printed materials are rather short and basic, but they are well written. I've viewed a version of sample materials geared to high-net-worth clients. They are more sophisticated, more detailed and equally well written.
For this implementation, during the first step (review) the advisor gathers information about the prospect's current portfolio. Depending on where the prospect's assets are currently held, it may be possible to import the data into the program. For now, however, let's assume that data will be entered manually.
Very little data is required-only the name of the security and the current dollar amount per holding. Perspective Partners maintains an extensive database of stocks, bonds, mutual funds and other financial instruments. Advisors can type a name, symbol or CUSIP, and in most cases the program will immediately recognize the security. If the system identifies more than one possible match, all are displayed and the advisor can designate the proper choice. Since data entry is quick, advisors can "process" prospect portfolios with minimal time and expense.
Once the data is entered, a "snapshot report" summarizes the portfolio by holding, asset allocation and sector weighting. From here, the advisor can click on an optional "Goal Check" button, which offers a screen to enter cash inflows and outflows throughout the planning period. Assuming that the advisor chooses to enter this information, the program performs a Monte Carlo simulation and supplies information on the likelihood of the portfolio supporting the client's goals.
Once the portfolio is entered, the rep generates a report. This report includes generic information about portfolio construction and asset allocation, followed by a snapshot of the current portfolio and the results of the Monte Carlo simulation (if generated). This is followed by a section entitled "Is My Asset Allocation Appropriate for My Goals," which includes a suitability questionnaire. Presumably the report will highlight possible weaknesses, encouraging the prospect to take the next step: completing the suitability questionnaire in preparation for a follow-up meeting. The printing of the initial report concludes "Step One."
Step Two, the Recommend Process, begins by entering the prospect's responses to the suitability questionnaire. The responses will generate an asset allocation recommendation. The allocation recommendation can be based upon the default Perspective Partners methodology or upon firm-specific models and methodologies. Once the primary allocation is generated, the advisor moves to the "goal check" step, which allows the advisor to account for cash inflows and outflows over the planning period.