making wealthcare easier david b. loeper, cima, cimc chairman & ceo

Making Wealthcare Easier

David B. Loeper, CIMA, CIMCChairman & CEO

©Copyright Financeware, Inc. 2002 All rights reserved

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Topics

»Wealthcare Presentation Report (Click Here to Open)

Includes:»New Allocation Reports »Efficient Frontier»New Allocation Recommendation»Implementation Worksheet

»New Asset Classes and Revised Capital Market Assumptions (see revised Whitepaper or open our free risk/return calculator) »Ability to control the asset allocation used EACH YEAR of any plan »Integrated Priorities Questionnaire »Updated Social Security Calculations »New, free sample client: Arvin Client

Wealthcare Presentation Report

New Asset Classes


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Our New Asset Allocation Page:

New plans start out with one allocation, for both taxable and tax advantaged assets over the life of the plan

To create a new allocation FOR THIS CLIENT, click on “New”, Name the allocation, and input the allocation…hit SAVE MY CHANGES

After you create the allocation and hit SAVE MY CHANGES, the new allocation will be plotted based on OUR risk and return assumptions. To input your own, simply uncheck the auto calculate risk (SD) & return (MEAN) and input your own. (unchecking will display a warning box reminding you that risk & return does not work with wealth simulator® or historical audit)

Select “OK” and proceed to enter your assumptions (we suggest using ours), then select “Save my changes” and the portfolio you created will be plotted based on YOUR assumptions


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To change an allocation at any point in the client’s life…

Place your mouse cursor over the time line to select the client age at which you want to change the allocation…

When you find the right age (66 in this case) click the time line and wait for the new time period to be inserted

You can create a new allocation as previously shown, OR…select from any of the allocations in the drop down menu which now includes:Custom Allocations for THIS clientYour Custom AllocationsYour Risk/Return AllocationsThe Financeware (FWC) DefaultsThe Wealthcare Capital Mgt. Defaults (WCM – same as FWC, more detailed)

Here we selected the Financeware (FWC) default Aggressive Growth allocation.


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We can input allocations at any level of detail…

Say we selected the WCM-Aggressive Growth allocation instead…

This portfolio was input at a much more detailed level

You can collapse or expand which asset classes you use. If you use any of the “Alternative Classes†”, you must use Monte Carlo simulation because there is not sufficient history for historical audit or wealth simulator®

Clicking the arrows (or macro class name) collapses or expands the asset classes for VIEWING purposes only

Notice the impact of the little extra efficiency we get by inputting the allocation at the more detailed level


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Of course, this depends on your efficient frontier…

If you input your own model allocations, those portfolios will form your efficient frontier

Your frontier, depending on what you entered in your advisor preferences, may have an in-efficient allocation that makes your frontier look weird

If you have inefficient allocations in your advisor allocation preferences, don’t be surprised if your frontier looks weird.


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If your frontier has inefficient allocations…

You can select one of our frontiers (same models but WCM are more detailed and appear slightly more efficient) by clicking the link “select Efficient Frontier”

This switches the frontier FOR THIS PLAN to the selected frontier

You can also set your default frontier FOR NEW PLANS from your preferences screen (all of your current clients are automatically set to a frontier based on the allocations you created in the advisor allocation preferences)

OR…You could remove inefficient allocations from your advisor allocation preferences


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You can also split the allocations by tax treatment

Here we have selected a frontier, used a WCM allocation starting at age 66, and input a custom allocation that is auto calculated for the risk/return assumption.

We can split the allocation by tax treatment by clicking the little “dash”. Say I only wanted the tax advantaged assets to use the WCM-Aggressive and I wanted the WCM-Balanced for the taxable assets at age 66

The allocation you have selected will be displayed as the “non-linked” allocation (can’t click it to select it because it is already selected)

Clicking the dash splits the taxable/tax advantaged allocations. Select the allocation you want to change by clicking its name, then select (or input) the allocation you wish to use for that tax treatment


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You can also split the allocations by tax treatment

But if you input your own risk and return assumptions you cannot split by tax status (would require input of a cross correlation matrix) so the “dash” for tax splitting will not display for those allocations

Notice the dash is not present if Risk and Return Auto Calculate is not checked…

The allocation you have selected will be displayed as the “non-linked” allocation (can’t click it to select it because it is already selected)


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You will also notice that our priorities questionnaire has been added…

This will become more important when our new status reports are released later this year enabling priorities to be discussed as part of your monitoring


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The upcoming status reports also need the “under management” flag for holdings…

“Managed” accounts (account values you regularly update because you have access to the data) are designated in the status report.

The accounts the client needs to provide updated values to you will be “unmanaged” and the last known value will automatically be used in the report…and…a reminder to provide you more recent account values (or move the money to you) will be part of the new status report.


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Finally…

We have added more precision to our automatically calculated social security»If you have manually entered SSI (from their annual statement for example), do not update the plan for these new calculations (their statement would be more precise)»But, if you are doing adjustments to a plan anyway, click the auto add SSI on the retirement income page for a bit of additional refinement.

Also…we have added a free sample Wealthcare Client (the same as the sample report) to your client list.

Questions?

making wealthcare easier david b. loeper, cima, cimc chairman & ceo

Documents

new asset allocation

new plans

copyright financeware

new time period

riskreturn allocations

custom allocations

arvin client slide

detailed level slide