What is Goals Based Advice?
Goals based advice quite simply links a client’s individual goals directly to the design of their portfolios, so the likelihood of achieving those goals is improved.
The traditional approach to building a portfolio is to use risk profiling to match a client’s investment risk tolerance to a Strategic Asset Allocation (SAA) benchmark, which by definition is more backwards-looking and static in nature.
Goals based advice is different. It seeks to look forward – using a more flexible portfolio design methodology and Dynamic Asset Allocation (DAA). The primary aim is to achieve a specific outcome or goal. It may be to achieve a real return objective (i.e. above cash or inflation) over a given time period. It may be to manage ‘risk’ within certain parameters. It may be to ensure that capital is available at a specific point in time by using liability matching or Liability Driven Investing (LDI).Regardless of what the primary driver of a portfolio may be there is usually a strong focus on downside risk protection.
There are many ways to provide Goals Based Advice depending on everyone’s different circumstances. AGBA is dedicated to helping you achieve your goals, whatever that journey may look like.
