Life Planner Use
Step-by-step guide to using AssetView Life Planner for creating financial projections, milestones, and life event planning.
Model Creation
You may create as many models as you wish. Variations of models enable sensitivity analysis and comparative outcome evaluation.
Model Types
There 2 types of Life Planner models: Life Models and Goal Models.
| Aspect | Life Models | Goal Models |
|---|---|---|
| Purpose | Predominant model type | Used to examine the effects of re-allocations across dimensions other than Asset Class; examples are Geography, Sector, and Risk |
| Scope | Financial planning including investments | Investment Planning |
| Rollup | Portfolio | Portfolio, Account Group, Asset Group |
| Type | ARules-based and transactional planning | Rules-based planning |
| Re-Allocation Dimensions | Asset Class | Asset Class, Geography, Sector, Risk, etc. |
| Re-Allocation Frequency | Multiple over time | One-time |
| Rates of return per asset class | Multiple over time | One-time |
| Support Dated Life Events (e.g. retiring, buying a second home) | Yes | No |
| Support Goals (e.g. net worth threshold) | Yes | Yes |
Life Models
Setup
| Aspect | Definition |
|---|---|
| End Date | End Date (i.e. a horizon) for the model |
| Asset Class Detail | Model detail; the Level 1 of Asset Classes (e.g. Fixed Income, Private Equity) or Level 2 of Asset Classes (Fixed Income Treasuries, Fixed Income CDs, Private Equity Funds, Private Equity Private Placements) |
| Cash on Hand | Default range of the amount of cash that you are comfortable having on hand |
| Cash Harvest | Asset classes (and in what weightings) to be sold to close cash shortages given allocation and spending requirements |
| Cash Invest | Asset classes (and in what weightings) to be bought with excess cash given allocation and spending requirements |
| Incoming Operations | Incoming operational funds such as wages and pensions |
| Outgoing Operations | Outgoing operational such as living expenses and charity |
| Effective Annual Rate | Default Effective Annual Rate across all asset classes or for each asset class |
Example: Effective Annual Rate per Asset Class
| Asset Class | Annual Rate of Return |
|---|---|
| Cash | 0% |
| Public Equities | 7% |
| Bonds | 4% |
| Real Estate | 9% |
| Crypto | 10% |
| Private Funds | 14% |
Events
| Aspect | Definition |
|---|---|
| Event Types | Either one-time or ongoing (starting as of a certain date and repeating for each period in the model thereafter) |
| Periods | For each event you will set a target date; the impact of any event occurs as of the next period in the model |
| Impact | Events can affect any of the variables in the model (e.g. a change in wages, allocations) or can stand-alone (e.g. buying a second home, giving to a charitable trust) |
Example
| Asset Class | Allocation (e.g. re-balancing) |
|---|---|
| Cash | 5% |
| Public Equities | 35% |
| Bonds | 25% |
| Real Estate | 12% |
| Crypto | 8% |
| Private Funds | 15% |
| Total | 100% |
Goal Models
Goals
Life Planner enables you create a model that targets a specific $ goal and/or a goal date. You may set your goal based on a:
- Specific Amount
- Number of Years from today
- Specific Date
Scope
The scope of the goal may be the entire portfolio, a specific account group, or a specific asset group.
Annual Growth Rate
You may define an annual growth rate (i.e. return %) for each element with a group.
Allocation
You may choose to re-allocate funds within the grouping at the starting period of the model.