Many passionate Nitrogen advisors use Envestnet MoneyGuide as their financial planning tool of choice. In this article, we'll highlight the easiest way to implement MoneyGuide into your Nitrogen workflow and have them work in harmony.
If you are looking to integrate Envestnet MoneyGuide and Nitrogen, you can view our article here.
In This Article
- Sample Workflow
- Matching MGP Preset Portfolios to Nitrogen Risk Numbers
- Using Custom Portfolio Sets in MGP
- Adjusting MGP's Historical Period
- Using Custom Asset Allocations in MGP
Most advisors begin the financial planning process in Nitrogen, then move to Envestnet MoneyGuide to develop their client's comprehensive financial plan. Once you've completed the initial setup of Envestnet MoneyGuide for optimal use with Nitrogen (as described in the sections below), you are ready to start using MoneyGuide and Nitrogen together!
Here is a sample workflow to use:
- Capture your client's Risk Number with Nitrogen.
- Analyze your client's portfolio in Nitrogen.
- Use Retirement Maps for a precursory discussion of goals.
- Create a new plan with MoneyGuide (such as a Financial Goal Plan, Lifetime Income Plan, etc.).
- Set the client or household "Loss Tolerance" based on the client's Nitrogen Risk Number.
Matching Envestnet MoneyGuide Preset Portfolios to Nitrogen Risk Numbers
If you prefer to use Envestnet MoneyGuide's preset portfolio templates without modification, here is a reference chart showing how each preset aligns to the Nitrogen Risk Number for a portfolio with the same asset allocation:
|Envestnet MoneyGuide Portfolios||Nitrogen Risk Number Ranges|
|Capital Preservation I||1-35|
|Capital Preservation II||36-41|
|Total Return I||53-57|
|Total Return II||58-65|
|Capital Growth I||66-72|
|Capital Growth II||73-77|
Using Custom Portfolio Sets in Envestnet MoneyGuide
Most advisors will create a set of Model Portfolios in Nitrogen, then set these models up as "Custom Portfolios" within Envestnet MoneyGuide.
Start by adding a new Portfolio Set in Envestnet MoneyGuide ( User Options > Create Portfolios), then use Add Portfolio to create a new portfolio.
Enter a name to use for the Portfolio, and the asset allocations to use. For ease of recognition, use the same name for the Portfolio as the model that you created in Nitrogen.
Matching Envestnet MoneyGuide Risk Scoring to Nitrogen Risk Numbers
Once you have added your Custom Portfolios to MoneyGuide, edit the "Standard Risk Scoring" and map the range of Risk Numbers from your Nitrogen model portfolios. For example, if you have a conservative model that you use for clients with a Risk Number of between 1 and 34, set the Score Range Beginning Value in MoneyGuide to 1. Likewise, set the Score Range Beginning Value for your next more aggressive model to 35, and so on.
Then, when setting your client's Risk Number in MoneyGuide, the closest matching Portfolio will be shown above the slider:
Adjusting Envestnet MoneyGuide's Historical Period
To ensure that Envestnet MoneyGuide and Nitrogen operate on the same historical timeframe for data, you may wish to change Envestnet MoneyGuide's Historical Period to match Nitrogen's January 1, 2008 to present timeframe. You can make this change under User Options > Create Portfolios > Edit Historical Period.
Using Custom Asset Allocations in Envestnet MoneyGuide
One additional step many Nitrogen and MoneyGuide users take is to set up custom Asset Classes within MoneyGuide so that both MoneyGuide and Nitrogen use the same specific investments (rather than generic asset classes) in their analysis: