What's it like to demonstrate the risk as it relates to an investor's entire portfolio? Advisors leverage Riskalyze to do just that.
It's more than examining a single account; it's analyzing them in light of each other, thus equipping you with greater tools, yet still with an easy-to-understand interface for simplicity. Below are just a few of the main best practices.
Quick Tip: To add additional accounts to an existing portfolio, scroll to the bottom of the portfolio and click "Add Account". See an example in the Working with Client Portfolios KB article.
Goal-Based Objectives
Multiple accounts in a single portfolio allow you, the advisor, to construct each account for a given purpose (retirement, grandkids 529 accounts, etc.). It also works beautifully with the client's Risk Number. Simply create each account with each specific objective in mind and align the overall portfolio with the investor's Risk Number. For more information: Goal-Based Objectives.
Quick Tip: For visuals and to learn more about presenting and working with multiple accounts in a portfolio, see the Working with Client Portfolios KB article.
Total Portfolio Analytics
Reviewing a single account is great, but showing a combined Risk Number is a powerful tool to convey a message of risk and return to clients and prospects alike. Advisors love presenting the total portfolio because it's not cherry-picking favorites—it's giving the honest big picture.
Quick Tip: Riskalyze has a great many analytics tools available to you at the portfolio level. To better understand the tools designed to give your clients insight into potential risks and returns and help you engineer a portfolio that fits their needs, check out the Portfolio Analysis in Riskalyze article.
Diversification Analysis
Diversification is powerful. To that effect, you can show the investor the Risk Number for each account individually, then compare that to the aggregate portfolio. Combining all accounts in a single portfolio shows the actual risk since it includes all the diversification (correlation) analyses for a deeper and richer presentation.
Advisors love to show prospects their proposal that includes balanced diversification, taking advantage of multiple scenarios yet hedging against many risks. Showing the Risk Number per account is important—but showing how the overall portfolio's risk drops is even more convincing. The final touch is using the Risk/Reward Heatmap to identify and drill deeper into specific securities.
Householding
Need to analyze a husband and wife? No problem. With Riskalyze, you can add multiple accounts and show your clients their householded portfolio, using risk as a springboard to dive into topics on their portfolio. We've heard from dozens of advisors who love this feature. With both spouses, they explore the grand financial picture and see how each account or piece fits together like a puzzle. For more information, check out Capturing the Risk Number of a Married Couple or Household.
Find Held-Away Assets
When talking with a prospect or existing client, looking at how their overall risk relates to their Risk Number and their portfolio helps advisors uncover held away assets. Advisors better assist the investor in managing the overall risk—even if they have no control over it. For more information, read about Held-Away Assets.