Award-winning integrated wealth planning proposition offers insights for informed investment decision-making

Investors might not be gifted with 20/20 visibility on the future returns from their portfolios, but they can certainly narrow the odds with an integrated financial planning tool as we look forward from 2020.

This is according to Ferdi Booysen, Head of Client Solutions at Old Mutual Wealth, who says that for too long the investment planning process has focused on individual risk appetite rather than individual goals.

“Too many investment decisions are guided by a risk tolerance questionnaire,” Booysen says. “This is often influenced by our emotional biases, one of the most common reasons clients miss their investment goals.”

“Financial planning is complex at the best of times, with various investment structures to consider with differing tax implications and much noise in the market to navigate. None of these considers what is important to the client.”

By enabling holistic financial planning conversations and trade-offs through state-of-the-art digital capabilities, Old Mutual Wealth’s interactive wealth planning tool — which was recently placed third in BCX’S 2020 Digital Innovation Award (Corporate category) — allows planners and clients to jointly consider different scenarios and see the long-term implications in real-time. The financial planner uses these applications to display an array of scenarios that talk back to the client’s individual goals and illustrates whether or not they are on track to achieve them.

“The power of these applications lies in their ability to keep clients involved in co-creating their financial plans leading to better outcomes for clients. We believe that by using technology, we can easily simplify complex financial planning decisions and choices and show clients the impact of their decisions immediately. This then creates the correct framework to identify the actions clients need to take alongside our financial planners in order to bridge the gap between their current reality and ideal financial reality. Gone are the days where we need to wait days for a financial analysis to be completed,” Booysen says.

“The tool can answer various important questions such as when financial independence will be reached, whether there will be sufficient liquidity during retirement and the impact of medical inflation on one’s financial plan.”

Booysen says this may not provide 20/20 vision of the future, but it does remove a lot of the guesswork.

“With the aid of an Integrated Wealth Planner, we let you focus on what is important to you and then help identify the most appropriate investment vehicles with the greatest probability of meeting your goals.

“We, therefore, ensure that you understand the risk you need to take, the risk you can afford to take, and the risk you’re willing to take. Clients who understand this, and what their investment target is, will make more rational and informed decisions.”

He cites the example of a client whose 15-year journey with Old Mutual Wealth has seen him achieve his goal of retiring in 2019.

Working with an Old Mutual Integrated Wealth Planner, this client was able to move from a position of relative uncertainty surrounding his retirement except for knowing when he planned to retire. Not only did he achieve his goal of retiring last year, but he has also done so debt-free while ticking off key items on his bucket list to boot.

“Money should be viewed as the sail of your yacht, helping you reach your desired destination. And Integrated Wealth Planning helps clients achieve that through our goal-based approach to financial planning that is centred on your hopes, goals, dreams and aspirations. We believe in planning for the person and not just their money,” Booysen says.