FA Whitepapers


July 2016  

Required or desired returns? That is the question

Clients will often begin the investment plan construction phase with a desired return objective in mind, but the problem is that their expectations can be inflated by what they see or read in the media. Some clients might even be in a rush to skip building a comprehensive plan altogether and to fill their portfolios with investments sporting attractive recent returns.
These clients might be surprised to find that the return necessary to achieve their long-term goals is meaningfully less than their desired return, creating opportunities to build more diversified, less volatile portfolios. This research paper focuses on helping clients understand their required returns and the potential benefits of using the required return to build a long-term investment plan.
Use this paper to:
  • Examine how identifying a client's required return can assist in building a financial plan. 
  • See what outside forces influence investors' desired return level and the potential pitfalls of taking cues from them.
  • Understand how helping clients perceive the difference between required returns and desired returns can provide a valuable contribution to their investment outcomes

- Read More