PureFacts Blog

Goals-based investing: Producing better outcomes for advisors and investors

May 13, 2019
Achieving lifestyle goals

Financial advisors are in the business of creating successful outcomes for their clients. Goals-based investing (GBI) is quickly becoming the investment tool of choice for many wealth management firms because of its numerous benefits for advisors and their investor clients alike.

Putting better outcomes within reach

A goals-based investing approach focuses on achieving an investor’s specific life goals rather than outperforming a benchmark or generating the highest possible portfolio return. Clients can work with their advisors to set a number of financial goals with different time horizons. Progress is measured by how well a client’s portfolio is tracking toward meeting their various goals, such as ensuring a comfortable retirement or saving for a child’s education.

A GBI approach differs from traditional investing in the way it views risk. Rather than being based on traditional volatility, risk is reframed as the ability to achieve a specific goal within a defined time horizon.

Support your advisors with a flexible GBI solution from PureFacts

Wealth management firms can enhance their advisor/client experience by introducing our PureFacts goals-based investing solution. We can integrate with a wide variety of planning solutions and data providers. Easy to implement, our GBI platform can be configured to meet all your business requirements and is fully scalable.

Our GBI solution includes a number of attractive features, including:

  • Mobile-optimized onboarding of individuals or households
  • Questionnaire-based or interactive KYC process
  • Personalized goal setting
  • Interactive visual goal projections
  • Risk profiling and portfolio matching
  • Customized investment selection
  • Auto-generation of Investment Policy Statement (IPS) at the end of onboarding
  • Ongoing progress tracking for both clients and advisors

Want to find out more about implementing our GBI solution for your firm? Talk to us.

 

6 reasons why goals-based investing makes sense

Here’s why a GBI approach is more effective at helping advisors build strong and long-lasting investment advice relationships with their clients.

1. It’s all about the client and their unique goals

Everyone has goals they want to achieve in life. A goals-based approach helps clients clearly identify and focus on what’s important to them. With GBI, an advisor uses a client’s unique goals as a starting point to develop investment strategies and portfolios that are best aligned with each of their goals.

2. Clients want a customized investment plan

Increasingly, clients are looking to their advisors to do more than simply build a performance-based investment portfolio. They want their advisors to create customized and holistic investment plans that will help them turn their dreams into reality. For example, a client may want to invest for retirement, buy a home, fund their children’s education, and own vacation property. With GBI, advisors can create unique goal types for their clients with a specific investment strategy for each.

3. Easy to track progress against goals

“Am I on track to achieve my goals?” This is one of the most important things that investors want to know. With a goals-based solution from PureFacts, advisors and their clients can track their progress online in a convenient portal. At any point in time, they can see how their money is doing and how much closer they are to achieving their goals.

4. Prevents irrational decision making

Some clients are overly affected by market turmoil and the unending media noise around volatility and investment outlooks. Or they have a fear of missing out (FOMO) on some hot new investment opportunity or trend. GBI helps minimize the tendency of these clients to derail their investment plans with irrational decision-making. By tracking against a client’s specific goals, GBI helps them fight the urge to respond inappropriately during market fluctuations. Instead, it helps them stay disciplined to reach their financial goals.

5. A more meaningful measure of success

A goals-based approach measures an investor’s success based on how well they’re tracking against their specific goals. This approach is more meaningful for clients than outperforming a benchmark because there’s no context. While it’s rewarding to beat a benchmark, how does that translate into achieving a specific goal such as having a big enough down payment in a few years to purchase a home.

6. Creates more client engagement

GBI provides better insights for advisors on the short and long-term needs and objectives of their clients. They gain a better understanding of what truly matters to their clients and can build more personalized investment strategies for them. This great depth of understanding supports more meaningful advisor/investor conversations and helps clients have greater confidence in achieving their goals.

 

Your clients’ goals are unique. With a GBI solution from PureFacts, you can create unique and customized investment plans to help them achieve their specific goals. Want to find out more about how to implement a goals-based solution at your wealth management firm? Talk to us today.

 

 

 

  • Victor Skrylev

    VP, Product