Many advisors are successfully using Riskalyze as they assist or manage 401(k) participant plans. They leverage Riskalyze to not only document the risk tolerance of participants but also match that with 401(k) models and guide plan participants in finding an approach that effectively works for them. The bonus is that this allows the advisor to get a better understanding of who is participating in the 401(k) pools.
Below is a framework you can adapt to your practice to utilize the core strengths of Riskalyze for your 401(k) plans.
In This Article
- Capturing Participants' Risk Numbers
- Leveraging Model Portfolios
- Using Asset Allocation Tickers
- Designing Suitable Portfolios
Capturing Participants' Risk Numbers
Many advisors will use the Lead Generation Questionnaire as the first step to help 401k participants determine their Risk Number. Some advisors will create a separate, unique landing page, especially for this purpose. This also gives advisors the ability to customize the page to reflect the advisor's value and strength in the 401k and retirement arena (see your web and/or graphic designer for details of creating a custom landing page).
Leveraging Model Portfolios
Use the Model Portfolio section in Riskalyze to create several "Allocations" to match various risk targets, such as Capital Preservation, Growth, Moderate, and Aggressive Growth:
Alternatively, you can create "Allocation Master" lists in the model portfolio section. These Allocation Master lists would include all the investment options available to 401(k) participants within a given company:
Using Asset Allocation Tickers
For compliance or efficiency reasons, many advisors use our Asset Allocation 401k solutions instead of using actual investments. The Riskalyze Asset Allocation 401k tickers are as follows:
|#USBOND||US Bond Allocations (401k) *proxy ETF = BND|
|#USRE||US Real Estate Allocation (401k) *proxy ETF = VNQ|
|#USSTOCKS||US Stock Allocation (401k) *proxy ETF = SPY|
|#USSBOND||US Short Term Bond (401k) *proxy ETF = SHY|
|#IStocks||International Stocks (401k) *proxy ETF = EFA|
|#USGOVBOND||US Government Bond Allocation (401k) *proxy ETF = IEF|
|#GBond||Global Bond Allocation (401k) *proxy ETF = BNDX|
|Company Stock XYZ||use a custom investment to model privately traded company stock|
Designing Suitable Portfolios
Once the participant has found their Risk Number, you can send them the model that best represents their needs. If you use Allocation Master lists (as described above), you can manually adjust allocations to match their Risk Number or use the Optimizer to design the proper portfolio.
Interested in learning more about how Riskalyze helps you assist and/or manage 401(k) participant plans? Check out our Retirement Plans tool or call 530-748-1660 to learn more.