Bridging the Gap Between Your Financial Goals and Investment Portfolio
By Andrew Dassori
Bridging the gap between your goals and portfolio is what financial planning is meant to do, but for decades financial advisors have missed this purpose with one-size-fits-all approaches. These assess your risk tolerance using questions that don’t consider goals with different time horizons or the idea that some might be more important to you than others.
Fortunately for individuals investing today, this process is starting to change.
A Smarter Financial Plan
The concept of matching risks to specific goals is nothing new. Large corporations have been doing it for years through a process called asset-liability matching. This is when a company identifies a future expense and matches it with an asset that will earn enough to pay that expense when it comes due. Some of the world’s largest hedge funds built their businesses helping companies solve these problems. After identifying liabilities, they ended up managing the assets to help corporate clients meet their goals of future payments.
While companies have accessed to these services for decades, individuals haven’t been so lucky. Small accounts naturally generate less in fees, so despite the value in the process, only large accounts could cover the costs. This process is to break down goals individually by targeted levels of risk, then build them back up into portfolios.
Welcome, Financial Technology
In recent months, financial technology (or “fintech“) has been a buzzword in banking and investment circles. In an industry notoriously ripe for disruption, technology has done just that. Bitcoin’s blockchain process has changed the way banking transactions take place, and financial advice has been similarly transformed. Applying algorithms to financial advisors’ key processes allows their services to be delivered efficiently to a much wider range of customers. It increases transparency, reduces fees, and makes information available online, like everything else in our increasingly digital lives.
Systematizing existing processes is what lets us improve on them – Wealthblocks are designed to do just that.
Financial Planning for the Next Generation
Wealthblocks make financial planning relevant. They represent your goals which are treated differently, because they are different. You aren’t lumped into an arbitrary risk bucket as a financial advisor’s easy way out. Instead, real goals are the building blocks of an investment system tailored to you and managed automatically. This allows you to focus on the rest of your life – with the click of a button you can see exactly where you stand.
The future of financial planning has arrived and is now available for everyone. The earlier you start building for your financial future, the closer you’ll be to making your goals a reality.
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