Totum is already utilizing built-in machine learning that includes over 100 variables in our quant models. As we obtain additional data, our product can automatically update their risk scores, similar to FICO scores. As life events occur, we receive the information from multiple sources and their risk scores will be updated. If the portfolio drifts outside the Totum Risk Band, the advisor will receive an alert.
Totum is also focused on improving lead generation. Technology is changing the way advisors interact with their clients and 63% of investors are taking the risk questionnaire via a mobile device. We are exploring how to better capture and interact with this data and utilize the information for lead generation. We have developed a solution and will be launching this feature soon.
Hortz: From your perspective and experience, what best advice you can give advisors today about how to think about and manage risk for their clients?
Shumbres: Advisors often tell me, “I know my clients better than any risk tool.” Although this may be true in some cases, this methodology would not hold up in arbitration. Having current data on a client’s risk tolerance based on multidimensional scoring is not only a solid insurance policy for the advisor, it also provides a reason to reach out to their clients annually which reinforces their relationship and boosts client retention and referrals.
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