Despite challenges for advisors and their clients brought on by the COVID-19 pandemic, “the future of this profession has never been brighter [and] the need for great advice has never been more clear,” Riskalyze CEO Aaron Klein said Wednesday in a keynote during the online Fearless Week conference.
Klein provided six key pieces of advice for advisors to help them and their clients survive and thrive in this “risk-first decade,” and then turned to demonstrations of several new enhancements to the Riskalyze platform.
6 Tips for Advisors
- Risk alignment is no longer a “nice to have” feature. It is a must.
- We must use language with simplicity and clarity.
- “Bulletproof” methodology matters. That is because math is a lot more reliable than predictions, especially right now, Klein said. “Predicting the future is a really bad way to evaluate risk,” he said, asking who would have possibly predicted we would be experiencing a pandemic at the same time as an oil war between Russia and Saudi Arabia during a U.S. presidential campaign, but the markets would still be “relatively flat for the year”?
- The way we connect will never be the same. So advisors must adapt and get comfortable using Zoom video conferencing and other conferencing solutions and video technologies.
- Acting in the best interest of clients is important at all times because the era of putting clients first is “here to stay,” Klein said.
- We need to focus on the decisions that count — the “decisions that drive, demonstrate and prove the incredible value they create,” he said. That is because research shows the number of decisions we make “has a degrading effect on the quality of our decisions over time,” he noted.
Klein went on to highlight four Riskalyze enhancements during the presentation:
- New portfolio analytics tools: The company provided a tour of the recently announced Detailed Portfolio Stats in Riskalyze Elite and demonstrated the delivery of Risk Alpha to clients with new printed reports. Advisors also now have the ability to attach additional pages to PDF reports for Form CRS delivery or other customizations.
- Intelligent Tax Optimization: Riskalyze’s new proprietary trading optimization engine, demonstrated live for the first time, now enables advisors to easily set capital gains budgets for clients. The technology runs millions of scenarios to determine exactly how many shares of each tax lot to get the client as close to their Risk Number target as possible, while staying under budget, according to the company.
- Automated tax loss harvesting: Riskalyze previewed the ability to automate the loss harvesting process for advisors. Unlike legacy rebalancing tools whose multi-step processes include the advisor telling the computer which securities might need to be harvested, Riskalyze’s automated solution analyzes millions of holdings each day for opportunities to harvest losses, it said. Riskalyze now also automatically manages parallel positions and facilitates switchback rebalancing after the 31-day wash sale window ends, it said.
- Coverage of structured products: Riskalyze also announced a major expansion of structured notes coverage via a new partnership with Halo Investing. Advisors can now not only “analyze tens of thousands” of structured notes in Riskalyze, but they will also “experience a seamless ‘single sign on’ experience” between Riskalyze and Halo, Riskalyze said.
General availability for structured products coverage will go live in early September and Automated tax loss harvesting will roll out for all eligible custodians later this year, Riskalyze said.
Intelligent Tax Optimization will “enter general availability by the end of September for most custodians,” Klein told viewers.