Next, using both the built-in portfolio assumptions and the client responses to the suitability questionnaire, Perspective Partners applies artificial intelligence to generate a one-page report highlighting potential portfolio problems. Snyder considers this report to be a key to the platform's success. He calls it a "disturber report.
"In order to encourage a prospect to take action," says Snyder, "you need to spotlight what is disturbing; you need to give them a reason to act. The industry at large has not developed these kinds of products." Perspective Partners, he believes, has. The program points out both structural deficiencies in the portfolio, as well as problems related to the clients risk tolerance and/or world view. The advisor is able to easily identify problems for the client, while offering a clear solution.
Again, this section is customizable, and report results are linked to the questions presented on the suitability questionnaire. The questionnaire used in the tested version analyzes three broad areas: portfolio diversification, portfolio risk, and cash flow. Other areas of inquiry can be added and linked to the analysis. For example, if the questionnaire had asked the client about inflation and the client expressed worries in this area, the report would have highlighted inflation-sensitive portfolio holdings. In one test I ran, the program identified problems such as asset class gaps, sector overweighting or underweighting, overlapping mutual fund holdings, reinvestment risk and insufficient cash flow.
Assuming that the client is "disturbed" and ready to engage you, the next step is to reconstitute the portfolio so that the problems you have identified are alleviated. This work is performed at the "Recommendation Workbench." The Workbench allows advisors to rapidly convert the existing portfolio to a "recommended" portfolio.
At the top of the screen the Workbench indicates the target asset allocation, as well as the current allocation. Below that, Workbench provides a view of the current portfolio, and the asset class that the individual holdings correspond with. By simply highlighting a holding (or adding a new one), advisors can use the scroll buttons to "dial up" or "dial down" an asset class, and see how the change affects the overall asset allocation. When an advisor is satisfied with a change, the "Apply" button is clicked to lock in the trade. Once the portfolio is brought into balance with the recommended asset allocation, the program generates a list of trades necessary for implementation.
The Perspective Partners platform possesses some appealing characteristics. First, it presents advisory firms with a standardized process, or workflow, assuring that all prospects will be handled in a uniform fashion and that a well-defined process will be followed. From a compliance standpoint the uniform process, combined with the ability to monitor all engagements, offers a high comfort level.
Second, the "sales" process, which has proved highly successful for others, may help users convert a higher percentage of prospects into clients. If the program proves successful at generating higher close rates, it will almost certainly pay for itself in a short period of time.
Another plus is the low manual data entry requirement. In many cases, information can be imported from other programs. If this is not possible, a few keystrokes or making a selection from a drop-down list gets the job done.
In my tests, I identified a couple of minor annoyances with the platform. One basic problem was that the system did not automatically log me off when I closed my Web browser or turned off my computer. As a result, when I tried to log back in, I got an error message telling me that I already had a session running. In order to log back in, I had to log off first. This programming oversight was annoying, but not fatal. A second problem I identified was that the mutual fund database lacked some newer funds. Again, this was a minor problem, but one that should be remedied.
The Goal Check section of this implementation left something to be desired. It performs an automatic inflation adjustment for expenses and Social Security payments, but that's it. This version does not offer the ability to set one's own assumptions. I'm told that a coming release will offer more flexibility.