In this article:
What is GOE?
With the Franklin Templeton Goals Optimization Engine, a portfolio can be created for different retirement goals an investor has. GOE® then actively adjusts the asset mix over time, seeking to maximize the probability of successfully reaching each goal. This shifts the optimization from a risk-centric approach, to making portfolio adjustments that increase the likelihood of achieving a specific goal.
Advisors have the option of choosing risk-based optimization vs. GOE-based optimization on a per client basis. GOE® also provides additional recommendations to improve the probability of achieving each investor’s goals.
What Makes GOE® Different From Traditional Retirement Portfolio Optimizations?
Why settle for investment options that can only reflect one goal? GOE® allows advisors to create unique portfolios not just for every investor, but also for different retirement goals an investor has, whether it’s Can I retire when I'm X? Or Am I on track to retire?
With GOE® advisors can combine their financial planning expertise with cutting-edge portfolio design and management.
GOE® recommendations provide advisors with more information and insights to share with their clients, making for smarter conversations.
How does the portfolio optimizer work?
The optimizer is available for these two retirement journeys: Can I Retire When I'm "X?" or Am I On Track to Retire?
GOE uses capital market assumptions for each asset class (small cap, mid-cap, etc..) > it then recommends an asset class mix that optimizes the person's probability of reaching their goal > Using a matching algorithm, the optimizer will choose the model portfolio (from your list of subscribed models) that has the lowest tracking error to the GOE recommended asset allocation
If you don't have a model portfolio that is less than 2% of the tracking error, then the optimizer will recommend one of our TIFIN Wealth default models that meets the tracking error requirement based on the GOE recommended asset allocation for the retirement goal
Learn More about the optimizer
Setting up GOE in TIFIN Wealth
Go to Profile & Settings > click on Configurations under Investments > click on Portfolio Optimizer
click Activate Optimizer > click Yes, activate now
FAQ's:
Can I switch back to the TIFIN Wealth optimizer, for risk tolerance?
Yes, you can switch back and forth between the two
Is there any additional cost for using GOE?
Nope!
Can I use TIFIN Risk, along with the GOE?
Sort of. If you have GOE turned on when someone completes the risk assessment-the optimizer will not take into account that person's risk band. It will only look at that person's retirement goal and choose a model portfolio that has the lowest tracking error to the GOE recommended asset allocation. We will still show the risk score for the portfolio, so you could still show the person how that portfolio fits (or doesn't fit) within their risk band.
Will the optimizer only choose Franklin Templeton, or can I use my firm level models?
The optimizer will only choose from your list of subscribed models-which would include your firm level models and any models you've added from our model marketplace.
What's the difference between the TIFIN Wealth's optimizer and GOE?
When the person has a completed risk assessment, and a retirement plan:
TIFIN Wealth optimizer: will first look at all the models within that person's risk band, then selects the portfolio that maximizes the probability of the client reaching their Goal
GOE: It will only take into account that person's retirement goal, and choose the model portfolio that matches closest to the GOE asset allocation recommendation, thus optimizing the person's probability of reaching that goal.
When a person has only completed the retirement plan:
TIFIN Wealth Optimizer: it will choose the model portfolio that has the highest potential forward looking return
GOE: Chooses the model portfolio that matches closest to the GOE asset allocation recommendation, thus, optimizing the person's probability of reaching that goal.