Benchmarks
Benchmarks are used on TIFIN Wealth when reviewing the performance of a clients portfolio or your model/recommendation. There are 4 default benchmarks:
SPY 60 AGG 40
SPY 40 AGG 60
SPY
AGG
To edit the weighting of an existing benchmark, click the Edit button on the right:
To create a new benchmark, click Create New:
Click Change to edit the Equity & Fixed Income ticker and weight (%) fields > Name the benchmark > click Create to save.
To upload a benchmark with a custom return series, switch to the Upload Custom tab and click Upload New > download the sample .csv file to view the file format for uploading a custom benchmark:
Copy & Paste your custom benchmark returns and the respective period end date in the appropriate columns. Be sure that the date is in MM/DD/YYYY format and the Return % is numerical only without formatting.
NOTE: The file must be a CSV and contain over 5 years of historical returns.
Save your benchmark returns file > Click to Upload the .csv or Drag & Drop it onto the upload widget > Name the Benchmark > click Upload
Proxy Override
If a portfolio contains unrecognized securities such as an old ticker pre-acquisition, a bond CUSIP, or a cash placeholder, a "Proxy" creates a mapping table to reconcile unrecognized securities to a preset, representative security with similar characteristics. This ensures our calculation engines accurately project forward returns and risk metrics.
To create a proxy:
Go to Settings > click Configurations > click on the Proxy Override tab:
Click Assign New Proxy > in the Assign fund to a Proxy widget, input the current symbol, cusip and respective information for the security you wish to proxy. Then enter a Proxy ticker that will replace the current security in risk and performance calculations.
Once you've set the proxy > click Save.
In this example, a client's portfolio held a JP Morgan perpetual bond with a 6.125% coupon (designated by the symbol 46625HJW1). A Schwab MMF was assigned as a proxy because of its low Risk Score.
To Edit or Delete an existing proxy, scroll to the right > click the three dots > Edit or Delete.
Proxy Override FAQs
I want to use fixed income securities in my custom models, how do I do that?
To use unrecognized securities in your custom models, you'll need to add the proxy override first, then use the file upload workflow for adding your model. The "create from scratch" option will not work for models with unrecognized securities.
How do I assign risk scores to unrecognized fixed income securities in my client portfolios?
If the portfolio is coming over from an integration (Schwab, Fidelity, etc.), TIFIN will automatically assign those securities a risk score based on their asset class type.
If you want to use unrecognized securities in a manually added portfolio, you'll need to add the proxy override first, then use the file upload workflow for adding the portfolio. The "create from scratch" option will not work for portfolios with unrecognized securities.
Portfolio Optimizer
Note: The TIFIN Wealth Optimizer is only relevant for the Retirement Planning model recommendations.
The TIFIN Wealth Optimizer selects the portfolio from your model universe that maximizes the probability of the client achieving their Retirement goal. The Optimizer accounts for the client’s current wealth, savings rate, other income and expense events, number of years to retirement, risk profile (or Risk Capacity and Preference), and the Required Wealth at retirement when selecting the optimal portfolio.
Your capital market forecasts determine each portfolio’s expected return and volatility which are key inputs in determining the probability of achieving a client’s goal.
Risk Categories
Note: Risk Categories are only relevant for the Retirement Planning model recommendations.
If a client completes a retirement plan assessment and their current portfolio isn't uploaded, TIFIN will use assumptions based on age to assign a Risk Tolerance category of Conservative, Moderate, or Aggressive.
The assigned model is used when projecting the client's wealth growth:
In short, when completing the Retirement Goals assessment, the Portfolio Optimizer will generate a recommended portfolio based upon the following:
If the investor has taken the Risk Assessment and has a Risk Band:
The optimizer will recommend a model that is within the Risk Band AND has the highest probability of achieving the stated retirement goal.
If the investor has not taken the Risk Assessment, their Age will determine the Risk Tolerance level for the optimizer.
In this scenario, the portfolio optimizer will limit the model universe to Active models (from the advisor's model marketplace) that fall between the equity allocations outlined in the Risk Categories for each Risk Tolerance Level.
For example, if the client is 47 years old, the optimizer will limit models to only those whose equity allocation is between 21% and 70%, which would include a 60/40 model but exclude a 20/80 model. In the former, the model is 60% equities which fall in between the 21-70% allocation in the Moderate category whereas a 20/80 model only has 20% equity, which is below the 21% equity threshold.
To change the Default Age Bands, click the Edit pencil symbol on the right > make the changes > click the checkmark to apply.
Note: changing the Risk Categories is not retroactive and will only apply to portfolios optimized after the settings have changed.
Forecasts
TIFIN averages Capital Market Assumptions (CMAs) reported across the largest global asset managers (i.e., JP Morgan, BlackRock, etc.) to generate a “wisdom of the experts” estimate. These assumptions are used across the whole platform when determining a portfolio's forward looking expected return and volatility, however, the changing/customization of these forecasts only applies to Goals-based Retirement journeys.
To change the forward looking assumptions:
Hover over a CMA > click the Edit pencil icon to the right of an Asset Class:
Adjust the Expected Return or Volatility > click the Checkmark to Save
To reset the forward looking assumptions, click Reset to Default:
