Content Personalization User's Guide
Contents
1. Default Ages Default Ages t Default Inflation Growth Rates Default Inflation Growth Rates Windfalls Asset Allocation Asset Allocation Savi sale p Market Assumptions Market Assumptions Investments la Name Towers Watson Market Assumptions Hame Towers Watson Market Assumptions Pensions fi Central High Low Central High Low dare ort E 295 4 95 1 49 Cash Me 295 495 1 49 Cash Diki E 4 2 6 59 2 68 Fixed Interest W 452 6s9 2 68 Fixed Interest l i B 7s 12 32 3 58 Property B 7 12 32 3 58 Property Protection PE 0 Pera p 2z E 8 21 13 7 2 62 UK Equity E 2 13 7 2 62 UK Equity TONER W 4 13 23 13 66 Developed Markets Equities W 849 13 23 3 66 Developed Markets Equities Expenses ae LJ 11 19 20 79 2 11 Emerging Markets Equities LJ 11 19 20 79 ili Emerging Markets Equities Estate Plans a Above Assumptions Include Yield Above Assumptions Include Yield pp Yield Data Yield Data Let s See piii Dividend Interest Dividend Interest enaa Yield Yield Yield Yield ao 5 45 Fixed Interest B o 5 45 Fixed Interest Reports 0 5 4 Property ld 0 5 4 Property Scene Woco o UK Equity Woco o UK Equity HA A 2 57 0 Developed Markets Equities bod 2 57 WO Developed Markets Equities y Accoun fad 3 22 0 Emerging Markets Equities ad 3 22 0 Emerging Markets Equities db Create Select Create d Select Taxation Taxation Investment Fees Investment Fees Liquidatio2. 5 The Save Asset Allocation dialogue will display Enter a name for the asset allocation and click Save Save Asset Allocation lare Asset Allocation Fisk Profile 1 Cash Risk Profile 10 Very Aggressive Risk Profile 2 Cautious Pick Profile 3 Cautious Fisk Profile 4 Cautious Balanced Riek Profile 5 Balanced Risk Profile 6 Balanced Fisk Profile 7 Adventurous Risk Profile amp Aggressive Risk Profile 9 Aggressive Eo Developed Markets Equities lit Emerging Markets Equities Central 723 100 Allocated High 11 65 Low 2 89 yant Elevate meaz he 25 Dividend he 1 56 Hame Model Partfolia A Creator Jeg S0aa proned User Last Updated Fri Sep 17 2010 12 00 AM The selected asset allocation is not valid for the current plan s market assumptions The following asset classes used by the allocation are not defined in the plan s market assumptions Freed Income 10 Pacific Market Equity 6 Developed Market Equity 25 US Market Equity 3 Emerging Market Equity 2 Asia Market Equity 4 Jane Income 10 The new asset allocation will be added to the software s asset allocation library To later use the asset allocation to set growth for an investment or pension or as a plan or stage default simply load it from the asset allocation library Go to the appropriate screen depending on how you want to use the portfolio Preference
3. 0 650 000 600 000 550 000 Average Total Growth Rate 6 52 500 000 450 000 400 000 350 000 300 000 250 000 200 000 150 000 100 000 2 me alll sm om oO OOO Pre Retirement Retirement HGES 25 24 29 Sl 33 935 Sf 39 42 435 45 47 49 51 59 S9 97 99 761 63 65 67 69 71 3 75 ZF 79 L 83 85 87 89 Single Chart Dual Chart Compare Plans Simulations Real Money Edit Time Performance The actual return applied to each account when using the Performance slider can be found on the Let s See chart details screen as shown above The overall return can vary in each year of the forecast as the relative proportion of total assets in each account changes over time TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document Flevate Efficient Frontier and Optimised Portfolios The Efficient Frontier view is only available when using the market assumptions from eValue FE However the optimised portfolios provided by eValue FE will always be available to load even if you choose to enter your own market assumptions The Efficient Frontier shows the risk and return characteristics of the optimised portfolios supplied by eValue FE This is the expected mean and standard deviations of returns for
4. indatiant Rate COMARET and National Average Earnings are anunptioans provided Oy Towerns Wats Changing Watan or CREMP but still using the Towerns Waksan market assumptions Wi meat the assunaotionts underhditg the plat are mat cartsistert The following inputs are configured with mean data from the eValue FE CAP Link model e Inflation Rate is used to inflate expenses in Voyant In the tool this is configured with the annualised 15 year mean RPI value from eValue FE e Annualised Average Weekly Earnings AWE currently shown as National Average Earnings on screen is used as the default salary growth assumption in Voyant In the tool this is configured with the annualised 15 year mean salary inflation value from eValue FE e Consumer Prices Index CPI Retail Prices Index RPI is used to inflate items such as escalating annuity payouts and to express a plan in today s money in Voyant In the tool this is configured with the annualised 15 year mean RPI value from eValue FE The other assumptions shown here are Voyant s standard assumptions and so are not derived from the eValue FE CAP Link model All of these values can be overwritten with your own assumptions however changing the assumptions for Inflation and CPI RPI whilst using the eValue FE market assumptions would mean that the assumptions underlying your plans would not be consistent TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voy
5. As with any tool for reasons of simplicity and usability there will be limitations Also many assumptions are made both within the Voyant tool and by eValue FE in running their CAP Link model You are responsible for understanding Voyant s limitations how the tool works and ensuring that the key assumptions used are appropriate when choosing how and when to use the tool with your clients PLEASE NOTE The cashflow projections and simulations in the tool are not FSA Key Features Illustrations Please note the following important considerations eValue FE market assumptions I5 year term The eValue FE market assumptions are derived from data over a 15 year time horizon You should be aware that the shorter the plan term the more volatile the expected investment return Therefore you may wish to consider using a different range to the default values in the tool Charges The eValue FE market assumptions are gross of charges An annual charge assumption is entered separately in Voyant and it is your responsibility to ensure these charges are appropriate to your client s plan It does not take any direct account of Initial Charges If you are using your own market assumptions these should be entered gross of charges with charges being entered separately as above Tax The eValue FE market assumptions are gross of tax There are various tax calculations made throughout the Voyant tool as defined by Voyant s standa
6. PM MW Market Assumptions Towers Watson Market Assu Continue to step 2 of these instructions to apply market assumptions to a plan to all plans or use them as a system default TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document vate Ele Step 2 Apply Market Assumptions to a Plan to All Plans or Use as a System Default The new set of market assumptions has been saved into the software s library of market assumptions From this library the assumptions are now available to be applied to plans individually or to all of the plans within a client record and to be used as the software s system default whenever a new client record is created Preferences Help 1 Go first to the Preferences screen 2 Decide whether the market assumptions will be applied to an individual plan or used as a new system default for new client records as you create them These options are not mutually exclusive To load the market assumptions into an individual plan Market Assumptions expand the Market Assumptions panel in the Plan JAUME ROU Fe NCUA ed 2 ESSE Central High Low Preferences section of the screen z 5 Cash Fixed Interest To use the market assumptions as a default for any future E af aed Proper
7. Sint To Savings 6 000 Unallocated 5 000 sa Detailed 3 000 2 000 1 000 Pre Retirement Retirement AGES 60 62 64 66 68 70 2 4 76 78 60 62 84 66 88 Pre Retirement Retirement Base Plan Success Year 1000 tries oe Age 81 Successes 49 Yearly probability of meeting goals Detailed Single Chart Dual Chart Compare Plans Simulations RealMoney Edit lime Historic Performance Life Insurance Need cashFlow Run simulation Monte Carlo L_ Detailed Overall probability of meeting goals _ Long Term Care terations 1000 O Income Protection Update Frequency 50 Need Analyser PPP EEE Note For plans lasting longer than 50 years the Monte Carlo simulation will only include the first 50 years of the plan This is because the 1000 scenario return files project forward 50 years Probabilities then are representative of analysis for only the first 50 years of the plan TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document Elevate Part 2 Important considerations when using the Tool The following important points should be understood and carefully considered when using the tool The primary function of the tool is to engage the client in the financial planning process
8. assets used in calculating inheritance tax is shown in the Legacy Overview The following are not allowed for when calculating inheritance tax Business property relief Previous gifts DGT and loan trusts Pension lump sum on death is always paid to the spouse irrespective of bypass trust Monte Carlo Simulation The Monte Carlo simulation will run where at least one account has been specified with reference to an underlying asset allocation rather than using a fixed growth rate The forecast of any accounts using a specified growth rate is not stochastic Therefore if a large proportion of a plan s accounts are defined using a fixed growth rate the output from the Monte Carlo simulation will tend to be either close to 0 or close to 100 depending on whether your client s goals were met at the specified growth rate The Monte Carlo simulation is intended for use where the majority of a plan s assets are specified using asset allocations TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document iveyant Elevate Preferences gt Default Inflation Growth Rates This section gives examples of where the inputs in this screen are used in Voyant e Inflation Rate Used to inflate expenses
9. each of the portfolios over a 15 year time horizon as defined by the CAP Link model The mean and standard deviations assume that the optimised portfolios are continuously rebalanced over the 15 year time horizon Because the optimised portfolios are designed to offer the best potential return for a given level of risk using the eValue FE CAP Link model they are deemed to be efficient and so form what we call the Efficient Frontier If you are using the eValue FE market assumptions the Efficient Frontier and optimised portfolios can be accessed from either of the Asset Allocation panels in Investments or Preferences by clicking the Select Optimal button AXA 10 Risk Category Portfolios Allocation Name Risk Profile 4 Cautious Balanced Efficient Fro ntier Cash Fixed Interest on Property lanl UK Equity Ll Developed Markets Equities d Emerging Markets Equities 100 Allocated Central 6 69 High 11 Low 2 67 Interest Inc 2 72 Dividend Inc 1 45 Return Rate 15 year Annualised Return Rate 30 40 50 60 7O 80 SOD 100 110 120 130 140 15 year Cummulative Standard Deviation 4 Low Risk High Efficient Allocation Frontier Toggle Efficient Frontier TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for
10. here Alternative Market Assumptions The tool comes configured with market assumptions from eValue FE However you can choose to use your own market assumptions including adding your own asset classes Where you do this the high central and low data you have entered will be used throughout the tool including in the Performance slider Please note that the high central and low data that you enter by asset class should be total return data gross of tax and charges For all asset classes other than Cash you will be required to enter a single dividend and or interest yield value for the purpose of Voyant s tax calculations You must have an asset class called Cash the returns for which are treated as 100 income TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document iveyant Elevate Asset Allocation Asset Allocation Allocation Hame Risk Profile 5 Balanced Cash investment as being made up of 70 UK Equity and 30 Fixed 36 Fixed Interest Interest Lal Property i UK Equity The high central low values shown against an asset allocation area f E Developed Markets Equities When we refer to asset allocation we mean how an investment is split by underlying asset classes For exampl
11. in Voyant e Investment Growth Rate Used as the fixed growth rate that is the default when Use Asset Allocation is not selected for an investment e Annualised Average Weekly Earnings Used as the default rate of salary inflation shown in the tool as National Average Earnings e Assumed Annuity Interest Rate Used as the default annuity interest rate used to convert an accumulated pension fund into an annuity at retirement e CPI RPI Used to inflate items such as escalating annuity payouts and to express a plan in today s money in Voyant Questions and Further Information Additional information and assistance on using the tool can be found in the user guides on the Voyant website and in the integrated help system on the tool itself Voyant can be contacted using links built into the tool for contacting customer services or by directly emailing support planwithvoyant com TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document Elevate Part 7 Glossary Glossary of technical terms used in this guide Monte Carlo Probability Simulation A Monte Carlo model is a model which is used to project multiple simulations of equally likely future events From these scenarios the probability of cert
12. is a required asset class with all others being adviser defined e There is no maximum limit on the number of asset classes however over fifteen classes may affect their display in the Voyant user interface Note The values shown are test data used only for purposes of example ROW_NAME_ DEVELOPED EMERGING _ CASH FIXED_INCOME PROPERTY UK EQUITY COLUMN _MARKETS_EQUITIES MARKETS_EQUITIES mean 0 029477521 0 04520735 0 078903496 0 082139385 0 08487256 0 111920878 upside 0 049529741 0 065939134 0 123173183 0 136978392 0 132263591 0 20786309 downside 0 014946791 0 026817661 0 035849652 0 026234078 0 036634051 0 021126515 Interest_yield 0 005449978 0 054016426 0 H are dividend_yield 0 0 0 030093791 0 025657627 0 032197799 N B The mean upside and downside labels equate to central high and low return values TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document vant Elevate How to Manually Load a Set of Customised Market Assumptions into the Tool Advisers have the option to manually load their own preferred set of market assumptions into the tool These market assumptions will only be saved locally Users running Voyant
13. iterations 1000 960 000 Update Frequency 50 880 000 43 1 rat Low 264 471 E All inflows 264 471 I Expenses Shortfall To Savings 25 681 Unallocated 24 155 800 000 720 000 640 000 560 000 480 000 400 000 lt Detailed 320 000 240 000 160 000 30 000 SE LS Education costs Part Time Retirement 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 61 83 85 87 89 nee 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 61 83 65 87 89 TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document lV A ALLAL i levate Optimised Portfolios The Efficient Frontier and Optimised Portfolio screen is only shown in the tool when using market assumptions from eValue FE This panel will be deactivated when the software is set to use alternative assumptions AXA 10 Risk Category Portfolios Allocation Name Risk Profile 4 Cautious Balanced Efficient Fro ntier Cash Fixed Interest oe Property land UK Equity Ll Developed Markets Equities 5 laa Emerging Markets Equities E Central 6 69 a 100 Allocated High 11 8 Low 2 67 l Interest Ine 2 72 Dividend Inc 1 45 15 year An
14. market assumptions and asset allocations and any updates made to them to the firm s entire user base including advisers and possibly their clients Read more How to Create and Load Asset Allocations into the Tool Manually Any number of asset allocations can be created and saved into the software s asset allocation library Once stored in this library portfolios can be Applied to accounts individually on the Investments and Pensions gt Money Purchase screens Used during particular stages of the plan on the Time screen Set as the default asset allocation for the software or for a plan on the Preferences screen l Asset Allocation 1 To create a new asset allocation go to any of these four screens a m m Allocation Hame Risk Profile 5 Balanced 2 Expand the Asset Allocation panel cah Local Fixed Interest 3 Enter percentages beside each applicable asset class The Property E UK Equity portfolio must be 100 allocated p L Developed Markets Equities Land Emerging Markets Equities 4 Click the Save button Central 7 23 100 Allocated High 11 69 Low 2 09 Interest Inc 2 5 Dividend Inc 1 56 Account Holdings Asset Allocation Sea TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document
15. screen market Plan Preferences Copyto System Copy to all Plans assumptions can be applied to the individual plan currently Default Ages Default Inflation Growth Rates Asset Allocation Market Assumptions viewed copied to every plan within the client record and used by default whenever a future client record is created 2 Expand the Market Assumptions panel located beneath Hame Towers Watson Market Assumptions either Plan Preferences or System Preferences Central High Low aad wal 3 Click the Create button E cel E property E 2 UK Equity iss 13 23 Developed Markets Equities Emerging Markets Equities Above Assumptions Include Yield E Yield Data Dividend Interest Yield Yield Lal jo Fixed Interest oe Property lal o Uk Equity o Developed Markets Equities i o Emerging Markets Equities Create 8 Select Taxation Investment Fees TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document The Save Market Assumptions dialogue will display On this Save Market Assum ptio ns Hame LLP Market Assumptions dialogue you can either Edit the default eValue FE Market Assumptions and click the Create button to save these edited assumptions as a n
16. the recipient of this document wAVEYan t Elevate Monte Carlo Probability Simulation Voyant s Monte Carlo simulation has been customised in the tool by utilising stochastic outputs from eValue FE s CAP Link model If you choose to use your own market assumptions this feature is not available As described in the introduction to this guide the output of one simulation of the CAP Link model is the projected investment returns over a 50 year period for each asset class 1000 such simulations are run to give the stochastic investment returns for each asset class as follows figures for illustration only Simulation 1 Simulation 2 Simulation 3 Simulation 1000 4 01 Voyant uses these projected investment returns in conjunction with the information you ve entered about your client to determine for each simulation whether the plan would meet its goals This calculation is repeated 1000 times to determine the probability of success as described below The stochastic data from eValue FE runs for 50 years Therefore the overall probability of success is the probability of hitting any goals you have specified within that 50 year period The Monte Carlo simulation will run where at least one account has been specified with reference to an underlying asset allocation rather than using a fixed growth rate The forecast of any accounts using a specified growth rate is not stochastic Therefore if a large proport
17. Allocated High 11 69 100 Allocated High 11 599 Low 2 89 Low 2 82 i Interest Inc 2 5 Interest Inc 2 35 f Dividend Inc 1 56 Dividend Inc 1 56 i Sit RR a eae Sarre Update Update All By Creator Update All Remaining Don t Update Don t Update Any By Creator Don t Update Any Remaining TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document The revised Asset Allocation may be a eValue FE Optimised Portfolio following a quarterly update or an Asset Allocation that an adviser has created and subsequently changed There is the option to update the plan or plans to use the modified asset allocation or keep the plan s with the previous version of the asset allocation All new plans created will use the updated asset allocation TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document Elevate Part 6 Further Information This section outlines some current technical facts about Voyant Annuity rates The annuity calculated at retirement is based on US mortality tables It is based on an interest rate entered by the us
18. E V2 yant Access provided by Elevate Technical User Guide for Advisers Guide published 09 2011 iveyant Elevate Table of Contents OM spicata ccna ttc E ea te E EEE eee nce TTE E E E E ce dati E A tine A E E E A eT 4 Part 1 How Market Assumptions work m The TOON ssecevernctscensaadsnsennnactanceneeanedscereandsaestatevangatneanepianreentcaametiansendeunats 5 A a E E S E EE E E E N E 5 What is the eValue FE CAP Link model ccicccccecccsssssescscscecscssescscesscsssscesssevscsussessvacsssssevavsvacsususevevaesaensaevas 5 eV aie FE Market FSS eT OIG ga syacsescaeamadecdcedstecenetecesnatscarnnansadeateasepnctsedscetsaayseadeadenes araa nea reidai e 6 ARS AG AES SS UIE ONS ogra cee scottse cts se te sa acta unae var aeanetewstecee oe anon dace aqeanctievalcacetenetiee haces oat asenanateadal ite seechecdese nes 7 Pe Taba eA Ar Lk SS UNOS ase saute ccateeecc aus savanna EE a E EE 7 PG SEU AOC AIM casera ce E E sare aoc ausesre SA 8 PPG OTA IGG psa crsiacconncanceacatisinadsana cstaauinas E E E E EEE E E E E E 12 Efficient Frontier and Optimised Potfolios seessssessssssssseesssrrrrerssssssssssssrrrerrerrrereessssssssssrseerrrrerrereesssssssseeeeeeeeeee 14 M nte Carlo Probability Sia OM esses E E E 15 Part 2 Important considerations when using The Tool sssssssssssessssssssssssssessseseeseesrerereeerererersrrrsrerreereenreenenerensssesss 17 eValue FE market assumptions 15 year term sesesiesaicaacicssacacctmuss
19. JTwos S axa_proded l l Sorte iit Last Updated Mon Oct 11 2010 02 51 PM comprised of asset classes together with Tiara aera Maclek Aaa the assumed central high and low Central _High EON Ws 45 EEE Cash growth rates and interest dividend s 659 za Fined Interest yields for each with the exception of a a cae i 13 1 LIEY Cash where the total return is the Be iaza aee Developed Markets Equities wered ii 2o73 aa Emerging Markets Equities a 7 Above Assumptions Include Yield Yield Data 5 Click the Load button Load Delete Cances The selected market assumptions will be loaded into the plan Market Assumptions or used as a system default depending on which section of the Name MW Market Assumptions Central High Lor aa mes es e cah rea Bs ess 68 Fixed Interest 7 89 112 32 etn P t These assumptions will now appear in the Market ae m ee 4 quity Assumptions panel e 13 23 66 Developed Markets Equities i 20 79 Al Emerging Markets Equities Above Assumptions Include Yield Yield Data 4 Create Select Preferences screen was chosen earlier Plan Preferences or The same set of market assumptions can also be loaded into the plan or used as a system default by repeating the previous steps in Pian Preferences Copia SKAISTU Gopi io AU begs N the Plan Preferences or System Preferences Once loaded these assumptions can be applied to all plans within a client file by cl
20. Markets Equities Emerging Markets Equities TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document nt Elevate V A ai lr 6 Click the OK button to continue The Save Market Assumptions Save Market Assumptions Jane 2 Market Assumptions Hame MW Market Assumptions Jane Market Assumptions Creator JTwos Sitaxa proxied LLP Market Assumptions era altace MLSE ASL Last Updated Mon Oct 11 2010 02 50 PM dialogue will again display 7 Enter a Name for this new set of market assumptions Central High Low The name chosen must be ms eos ae unique among those in tse jeso 2 68 Fixed Interest already saved in the market imal 6912 32 ek Be 13 7 _ Uk Equity assumptions library i s49 1323 3 66 Developed Markets Equities i 11 19 20 79 2 11 Emerging Markets Equities Above Assumptions Include Yield Yield Data 8 Click the Create button to load the new set of market assumptions into Voyant The new set of market assumptions are now loaded and available for use in the software Save Market Assumptions Jane 2 Market Assumptions Name Jane deep Assumptions Creator JTwo37Si axa_proxied LLP Market Assumptions E Last Updated Mon Oct 11 2010 02 51
21. ain scenarios being achieved can be estimated The eValue FE CAP Link model is a Monte Carlo model and is used in Voyant to estimate the probability of a client s goals being achieved Optimised Portfolio Asset allocation designed to offer the best potential return for a given level of risk where the risk is defined as a Standard Deviation of return Standard Deviation A measure of the expected variability of investment returns and hence of risk TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document
22. anged in order of magnitude and the 950 High and 50 Low values are selected The Central value is the mean of this 15 year averaged data It is these values that you can see in the Preferences gt Market Assumptions screen and are used throughout the tool Due to the simplifications made the high and low values are not percentile returns from the eValue FE CAP Link model With the exception of Cash for each asset class an additional assumption is required for how much of the total return is income dividend yield or interest yield depending on the asset class This is needed for the purpose of Voyant s tax calculations only this income return is assumed to be already included within the high central and low returns A cash income return is not required because the total returns are assumed to be 100 income For the other asset classes the assumption is the mean of the 15 year average income return data from the CAP Link model Whilst these parameters are derived from the CAP Link model they are used in deterministic projections in the tool assuming the same investment return for each asset class in each year of the forecast The approach taken is simplified and as such it is only intended to give an idea of the potential variability of investment returns by asset class Taxes and Charges Assumptions You should note that all of the input returns are gross of taxes and charges This is covered in more detail
23. ant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document V LA al abe Elevate Deterministic Cash Flow Analysis Investment return assumptions can be defined in Voyant using a fixed growth rate or by specifying an underlying asset allocation If an asset allocation is used the software calculates a growth rate from the central market assumptions as specified in Preferences gt Market Assumptions Type Stock Market ISA y To set the software to compute investment returns from market Hime assumptions select the Use Asset Allocation option as shown right Balance 15 000 In this situation the fields for Growth Rate Dividend Yield and on ee contutone Jo Interest Yield are disabled because this information has been defined _ Contribute Before Paving Expenses in Preferences Purchase Value boo NOTE The high central and low investment returns entered in pepe Preferences are total return data i e income capital returns Growth amp Yield Where Use Asset Allocation is not selected in the Growth and Yield Growth Rate gross 6 w Use Asset Allocation screen the Growth Rate required is capital growth as opposed to total Fees oH returns Dividend and Interest Yields are then entered separately on Dividend Yield gross 0 this screen and will be added t
24. dential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document Elevate When the Performance button is selected the slider shown on the right of the chart will allow a user to scroll between the low and high estimates for returns The tool uses the high central and low estimates for each asset class and the position of the slider to calculate a weighted growth rate for each investment with an applied asset allocation For savings and investments that do not use asset allocation the tool varies the fixed growth rate for each account by 6 at either extreme of the performance slider Savings and current accounts are limited to a low estimate of 0 This is standard Voyant functionality Base Plan Assets with Performance Slider 1 200 000 1 150 000 Base Plan Year 2043 Age 58 F4 1 100 000 Cash Flow Expenses Investments Pensions Property Debts Protection Taxes 1 050 000 End of Year Growth Contributions 1 900 000 Name Owner s Balance _ Rate Scheduled Unsched Withdrawals 950 000 Savings John 64 850 5 5 Planned 0 683 Int 3 416 6 Actual 0 0 900 000 850 000 130 869 6 73 Planned 0 800 000 Div 1 723 156 Actual 0 0 Int 3 072 25 750 000 700 000 John s Cash 0 5 5 Planned 0 Actual
25. e Each class must be formatted in all caps with an underscore used to represent spaces e g SUB INVESTMENT_GRADE_BONDS Voyant will parse these column names smartly for example The column heading and asset class UK_LARGE_CAP_STOCKS will be parsed and displayed in Voyant as UK Large Cap Stocks Similarly the column heading SUB INVESTMENT_GRADE_BONDS will be parsed and displayed in Voyant as Sub investment Grade Bonds One asset class CASH is required There is no limit on the number of asset classes however 15 is the recommended maximum Introducing more than 15 classes may affect their display in the software s user interface The market assumptions file should be similar in format to the example shown on the following page TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document yant WV Elevate How to Format a Market Assumptions File e The market assumptions file must be in a comma separated value csv format e Returns must be in decimal format not a percentage format e g 6 2 must be entered as 062 in this file not as 6 2 or 6 2 e Asset classes which serve as the column headings must be formatted in all caps with underscores used to represent spaces e CASH
26. e we could define an weighted average of the high central and low values for the Emerging Markets Equities central 7 23 underlying asset classes 100 Allocated High 11 69 Low 2 09 Interest Inc 2 55 Dividend Inc 1 56 Account Holdings Asset Allocation Gea eValue FE have created a range of suggested optimised portfolios which are available on the Elevate platform These portfolios are created using the CAP Link model and each one is designed to maximise returns for a given tolerated level of risk volatility of investment returns The optimised portfolios are still available if you enter your own market assumptions however in this situation as the high central and low values shown will be calculated from your own assumptions they will not be consistent with the CAP Link model used to create the optimised portfolios The optimised portfolios are explained further in the section Efficient Frontier and Optimised Portfolios read more TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document iveyant Elevate Default Inflation Growth Rates Default Inflation Growth Rates Inflation Rate Investment Growth Rate 6 National Average Earnings 4 Annuity Assumed Interest Rate CPURPI
27. ed growth rate or by specifying an underlying asset allocation Where an underlying asset allocation is used the tool will show you a range of potential total investment returns from high to low These returns are derived from the CAP Link model outputs The same high central low data is used in the Performance slider The data can be seen in the Preferences gt Market Assumptions screen You should be clear that the approach adopted is intended to give you and your clients a feel for the potential variability of investment returns The figures are in no way intended to represent minimum or expected returns You should be comfortable with the range of total return values for each asset class before using the tool with eValue FE market assumptions A summary of the derivation of the high central and low total return values for the six Elevate asset classes are as follows TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document _ V A ul ane Elevate For each asset class the total returns for the first 15 years of each of the 1000 projections are averaged The returns in each year are equally weighted in this average calculation For each asset class the 1000 simulations of the 15 year average returns are arr
28. en E opery in the annual details for each investment Z ae as Developed Markets Equities Emerging Markets Equities 100 Allocated Central 7 23 High 17 69 Low 2 59 Interest Inc 2 5 Dividend Inc 1 56 Account Holdings Asset Allocation Miew Edit _ Deterministic cash flow projections are shown in the Let s See charts where growth rates can be viewed by clicking on the chart legend Age 65 E Ea Total Expenses 7 324 E Alinflows 217 406 W Expenses Shortfall Unsecured Pensions 49 554 W Annuity Detailed view link i Employment _ Savings and Invest 167 855 TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document iV j ane Elevate Asset allocation based growth rates can be viewed on the Investments and Pensions tabs of the chart s details panel as shown below Note The annual details panel displays the growth return rate net of fees entered for the investment tase Plan Assets paisa we Base Plan Assets 1 150 000 Base Plan Year 2027 Age 42 X 1 100 000 Cash Flow Expenses Investments Pensions Property Debts Protection Taxes 1 050 000 End of Year Growth Contributio
29. er This interest rate is combined with the mortality tables to produce an annuity rate Interest and Dividends Bank and Building Society interest is included in the income tax calculation However they are not shown in the tool as income unless the user specifically sets this income up as a withdrawal If assets yielding dividends and interest are assigned to specific life stages this can impact their payment The Cash Flow chart attempts to show a full picture of the source of funds which are used to pay expenses it is not intended to be a full account of every debit and credit Bearing this in mind when you view the Cashflow tab under the detailed information view if you have any tax on interest that is deducted at source it will be listed as a positive cash flow For dividends on the cash flow chart the display shows the gross percentage growth rate along with the net monetary value of the dividend Contributions and Expenses Any contributions entered within the tool are annualised and applied at the end of each year after growth or interest has been applied Any expenses or charges are annualised and applied at the start of each year The only exception to this rule is where an expense forces the liquidation of an asset at the end of a year Employer one off pension contributions are not directly modelled at the present time Indirectly they can be modelled by setting up a separate pension for the contribution Improvemen
30. ew market assumptions set Load an entirely new set of market assumptions and asset A ITE Bo classes defined in a market assumptions file 4 Click the Load from File button to load an entirely new Jane 2 Market Assumptions Jane Market Assumptions LLP Market Assumptions Towers Watson Market Assu Load from File Creator JTwo3 5 axa_proxied Last Updated Mon Oct 11 2010 02 47 PM Central High Bis 2s gs es eo on en Me joc 52 mes es 12s mes sc is 2079 His 4 25 Above Assumptions Include Yield Yield Data Pa ra 2 eo 5 i co on Cash Fixed Income Property UK Equity Developed Market Equity Emerging Market Equity US Market Equity set of market assumptions and asset classes defined in a market assumptions file 5 The Install Market Assumption dialogue will display Click the browse button to locate and select the Market Assumptions file The new set of market assumptions and its related asset classes will be displayed in the Install Market Assumptions dialogue Confirm that these are the expected set of asset classes and market assumptions Install Market Assumptions Market Assumptions File nents and Settings Jane Boyle Desktopitw 15yr investment aygs 2708 cs laa Preview G49 15 25 6 11 19 20 79 2 11 Above Assumptions Include Yield Yield Data Cash Fixed Interest Property UK Equity Developed
31. ght belonging to Voyant Inc Use of this information is solely for the recipient of this document ant Elevate V ul ar Part 5 Updates to Market Assumptions and Asset Allocations Updates to eValue FE data To ensure the tool remains current quarterly updates are made by eValue FE to their CAP Link model Therefore the outputs from this model used in the tool including the suggested optimised portfolios may change on a quarterly basis Following such an update the market assumptions and stochastic data for the Monte Carlo simulation will be updated in the tool The new data will apply to all plans existing and new You should note however that the inflationary assumptions as input on the Default Inflation Growth Rate screen will not automatically update for old plans Therefore you should update these yourself when opening an existing plan to ensure that they remain consistent with the eValue FE market assumptions Updates to Alternative Market Assumptions If you are choosing to use your own market assumptions and you make updates to these assumptions the new data will apply to all plans existing and new If you wish you can apply revised market assumptions to new plans only by creating a new named market assumption set rather than updating an old set Updates to Asset Allocations including the eValue FE Optimised Portfolios When a client record is opened which contains a plan o
32. he ability to build what if scenarios and demonstrate the impact of life events The tool has been customised to include market assumptions provided by eValue FE which are consistent with the optimised portfolios suggested on the Elevate platform You do however have the option to put your own market assumptions in the tool eValue FE is a global professional services firm with expertise in the areas of risk and capital management with offices around the world They are a global leader in risk technology for the insurance industry and their Global CAP Link model has been used by several hundred institutions for over 15 years TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document iveyant Elevate Part 1 How Market Assumptions work in the Tool This section details how market assumptions work in the tool Market assumptions are assumptions for investment returns for specific asset classes Asset Classes The tool defaults to the following six asset classes It is these asset classes for which eValue FE provide market assumptions and are used in the optimised portfolios suggested on the Elevate platform Deposit based investments that pay interest held with institutions such as banks Cash and building societies Pro
33. icking the Copy to All Plans button 6 After these updates are complete finish by clicking the Apply button in the lower right corner of the Preferences screen The updated market assumptions will be saved Clear These market assumptions are then used in the tool in the deterministic projections throughout the tool the Performance Slider and in places where a high central and low estimate of investment returns is shown TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document iveyant Elevate How to Provide a Preferred Set of Market Assumptions to Voyant for Inclusion in a White Labelled Rebranded Version of the Software Firms that subscribe to Voyant s optional white labelling service may choose to have their preferred market assumptions added to their rebranded versions of the software White labelling has the added advantage of easily and uniformly distributing market assumptions and model portfolios as well as any future updates made to them to the firm s entire user base including advisers and their clients To have a preferred set of market assumptions added to a rebranded version of software first create a market assumptions file formatted as detailed in this guide and then e mail this fi
34. ion of a plan s accounts are defined using a fixed growth rate the output from the Monte Carlo simulation will tend to be either close to 0 or close to 100 depending on whether your client s goals were met at the specified growth rate The Monte Carlo simulation is intended for use where the majority of a plan s accounts are specified using asset allocations TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document Elevate V jz al i 7 The upper chart of the Monte Carlo simulation illustrates the basic deterministic cash flow using the default central return estimates This forecast will run until mortality as input by the user rather than for a maximum of 50 years as in the lower chart The lower chart represents the probability of success in each year Probability of success is derived from the percentage of the 1000 simulations that result in no expense shortfalls in the year The overall probability of success shown in the bottom right section of the screen displays the proportion of the 1000 scenario simulations that recorded no expense shortfalls in any year of the plan Base Plan Cash Flow 12 000 11 000 10 000 9 000 e 8 000 BB All inflows 10 077 I Expenses Shortfall
35. ions asset classes and model portfolios which can be made a permanent addition to their white labelled versions of the software White labelling has the advantage of easily and uniformly distributing assumptions and portfolios as well as any updates made to them to the firm s entire user base including advisers and their clients Read more Define Asset Classes and Returns in a Market Assumptions File A market assumptions file is required to define asset classes together with central high and low total annual returns and for all asset classes other than Cash a dividend yield and or interest yield The income assumptions are not needed for Cash because 100 of the return is assumed to be income The central returns for each asset class sector should be those that you wish to be used in projections in Voyant where investments are defined by an underlying asset allocation The high central low annual returns entered should be those that you wish to be used whenever a high central low summary is shown and that will be used to define the range for the Performance Slider It is this file that the adviser will either import manually into the tool or send to Voyant to be included in a white labelled rebranded version of the software This file must be in a comma separated value csv format a common save as format option in Microsoft Excel and other programs Asset classes are defined as column headings in the market assumptions fil
36. ions of the software White labelling has the advantage of easily and uniformly distributing market assumptions and asset allocations as well as any updates made to them to the firm s entire user base including advisers and their clients For example if a firm wishes to offer its advisers the option to choose a preconfigured Low Risk Income asset allocation this could be provided to Voyant for addition to its rebranded version of the software Once added this asset allocation will become available to the firm s entire user base Firms can provide any number of asset allocation portfolios to Voyant for addition to their rebranded software Voyant requires only the name of the each asset allocation and the percentage allocated to each asset class within them Example Asset Allocation Low Risk Income 30 Sub investment Grade Bonds 30 Cash 40 Investment Grade Bonds The total of the asset class percentages must equal 100 The asset classes used in an asset allocation must exist in the market assumptions set Unlike the market assumption files discussed earlier in this guide there are no special file formatting requirements for asset allocations Details can be sent to Voyant in a variety of file formats e g e mail Word document text file Excel spreadsheet TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyri
37. le to Voyant Support support planwithvoyant co uk Any future changes to Market Assumptions or Asset Allocations will be covered under Voyant s monthly rebranding maintenance fee TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document ant Elevate Part 4 Adding Asset Allocations to the Tool Once market assumptions are defined asset allocations can be built and saved into the software where they can be applied to individual investments or used as a plan s default portfolio As with market assumptions there are two ways to add asset allocations to the tool Create asset allocations in the software manually Advisers can create their own asset allocations within the software These will be available only on the local instance of Voyant However once an asset allocation is used in a client file it will continue to be used whenever the plan is accessed from a different computer or if shared with clients or colleagues Have assumptions and asset allocations included in a white labelled rebranded version of the software Firms subscribing to Voyant s optional white labelling service can have asset allocations added to their rebranded versions of the software White labelling has the advantage of easily and uniformly distributing
38. n Order Liquidation Order Savings Order Savings Order Calculation Settings Calculation Settings Application Preferences Preferences Help gt TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document ant Elevate Step Add a new Set of Market Assumptions to Voyant To load a customised set of market assumptions into Voyant first open and log into the software You may select and open an existing client record or choose to create a new one 1 Click the Preferences link located in the bottom left corner of the Preferences Help screen The Preferences screen is divided into two sections System Preferences on the left control the general settings for the software These global settings are used as defaults whenever a new client record is created in Voyant Plan Preferences on the right control the default settings for the individual plan currently open in Voyant These plan specific preferences can be quite different from the software s system preferences which are only initial defaults Plan preferences are applied to plans individually but can be copied to all of the plans within a client record by clicking the Copy to All Plans button Using these two sections of the Preferences
39. native Market Assumptions into the Tool The tool has been customised to include market assumptions provided by eValue FE which are consistent with the optimised portfolios suggested on the Elevate platform Although these are the default market assumptions the software retains the flexibility to allow advisers to create or import their own proprietary or preferred sets of market assumptions however certain restrictions will apply Some advanced features will be disabled when alternative market assumptions are used and imported market assumptions must meet certain formatting standards In this section of the guide we will identify what these restrictions are the formatting requirements for custom market assumption files and outline the steps to import market assumptions into the tool Features Disabled when Using Alternative Market Assumptions Two features will be disabled automatically when the tool is set to use an alternative set of market assumptions instead of the default set provided by eValue FE Monte Carlo Simulation The Monte Carlo analysis in the tool uses returns for each asset class provided by eValue FE projected over 50 years and 1000 scenarios Simulations can be run in the tool only when the software is using market assumptions from eValue FE This simulation will be disabled whenever the software is set to use alternative market assumptions Cancel Simulation e1 120000 Base Plan Cash Flow 1 040 000
40. ncecaoeescemionsncse 30 How to Create and Load Asset Allocations into the tool Manually sessssssesssssssssessseeeeeresssssssssssssereerrerrereeessssse 30 How to Provide Asset Allocation to Voyant for Inclusion in a White Labelled Rebranded Version of HLS OLY n o E E E T E EAE A E EN E E E T E AA A secenene 32 Part 5 Updates to Market Assumptions and Asset Allocations sseneeeesssssssssssssssssrererrersssssssssssssssssererereeessssse 33 Updates to ey ane FE At s E EEEN RRE 33 TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document yant Elevate Updates to Alternative Market Assumptions essssssssssssssserrerrrrresssssssssssssrrerrrreerreeesssssssssseretrrreeeereeesssssssseseeerereee 33 Updates to Asset Allocations including the eValue FE Optimised Portfolios 0 ceecccccccceeeeeeeeeeessssseseeeeeeeeees 33 Part O Funar MINOT INA IN a doe cates cas cosmos pi aseee ccaae E Aa Ra S a conde seen anasosacanseatendanaass 35 A a A S a E E N S E A S 35 inte e MBA e A EE A E EE O E 35 Contmibutions and EXPENSES erai EAE EER ERa E EREE 35 EN E E E E acdecemeceateetace 36 ID AA TN o eee E E E E E E E a E E E E E 36 Mone o A aea TE EEEE E E EENE E O AAT E A E EE 36 Preferences gt Detault Inflation Growth Rates acc
41. ns 1 000 000 Name Owner s Balance Rate Scheduled Unsched Withdrawals 950 000 Savings John 32 561 55 Planned 0 343 Int 1 715 6 Actual 0 0 900 000 a 47 221 6 73 Planned 0 800 000 Div 622 1 56 Actual 0 0 Int 1 109 25 750 000 700 000 John s Cash 0 55 Planned 0 Actual 0 650 000 600 000 550 000 Average Total Growth Rate 6 22 500 000 450 000 400 000 350 000 300 000 250 000 200 000 l 150 000 100 000 aa sannneenener veel sm GG GOO Pre Retirement Retirement AGES 2S 27 22495 SL aso Sa JA 39 941 437 45 A 49 51 53 voor of 9 GL 6a 65S 67 5692 Vi bide vo efi o49 Ble 63 S GE d9 Single Chart Dual Chart Compare Plans Simulations Real Money Edit Time Performance Performance Slider The Performance slider is used to illustrate whether planning goals could potentially be met when investment performance is adjusted upwards or downwards The range of the slider is intended to show a reasonable range of investment returns The figures are in no way intended to represent minimum or expected returns Results are shown in the Let s See charts os oo of i To use the Performance slider click the Performance button on the Let s See charts panel A slider bar will display to the right of the chart TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confi
42. nualised Return Rate e 30 40 50 60 70 80 90 100 110 120 130 140 15 year Cummutlative Standard Deviation Low Risk High Efficient Allocation Frontier za Toggle Efficient Frontier TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document al Viyan t z Elevate Two Options for Adding Alternative Market Assumptions to the Tool Two options are available for adding alternative sets of market assumptions and asset classes into the software Load or create market assumptions in the software manually Advisers can load their own market assumptions into the tool Initially these assumptions will be available only on the locally installed instance of Voyant However once a plan is created using customised market assumptions these assumptions will become associated with the plan following the client file wherever it goes and they will continue to be used whenever the plan is accessed from another computer or if shared with clients or colleagues Read more Have market assumptions included in a white labelled rebranded version of the software Firms that subscribe to Voyant s optional white labelling service i e rebranding may provide Voyant their own proprietary or preferred sets of market assumpt
43. o the input Growth Rate in Voyant s Interest Yield gross O ag calculations Values G Present Value Future Value The Asset Allocation panel shown right can then be used to specify Type Stock Market IS4 wl the underlying asset allocation for your investment Name Balance 15 000 contbutone je _ Contribute Before Paying Expenses Purchase Value boo O Advanced Growth amp Yield Asset Allocation Allocation Hame Risk Profile 5 Balanced bal Cash Lon Fixed Interest Lon Property LJ UK Equity Lean Developed Markets Equities Led Emerging Markets Equities 100 Allocated Central 7 23 High 11 69 Low 259 Interest Inc 2 5 Dividend Inc 1 56 Account Holdings Asset Allocation Select Mntimal TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document Elevate The tool calculates deterministic cash flow projections using a Asset Allocation weighted average return for the asset allocation using the Allocation Name Risk Profile 5 Balanced central return estimates for each asset class The central Lond Cash return value for the asset allocation is displayed on the asset Lael Fixed Interest allocation selection screen shown right and can also be se
44. on multiple computers would need to install the assumptions on each computer if they are to be used as a system default Once a plan is created using customised market assumptions these assumptions become associated with the plan and will continue to be used even when the plan is shared with clients or colleagues Any number of customised market assumption sets can be offered through Voyant Accessed through Preferences assumptions can be easily loaded into Voyant where they can be applied to plans individually applied to all of the plans within a client record or used as the software s default market assumptions set whenever a new client record is created Access provided by Elevate iveyant Access provided by Elevate 4 Preferences System preferences can be used to overwrite plan specific preferences by clicking Copy to Plan Plan specific preferences can likewise be transferred into system preferences by clicking Copy to System Click Copy to all Plans to apply plan specific preferences to all of the plans within a portfolio Client New Open Save What ff Manage Plans Base Plan Active va People M Time System Preferences Copyto Plan Restore Defaults Plan Preferences Copyto System Copy to all Plans Employment OrhecTdeania
45. or each scenario the projected investment returns for the next 50 years are produced for each of the six asset classes eValue FE run the CAP Link model to give 1000 equally likely simulations of the projected returns for each asset class TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document iveyant j amp Elevate It is this stochastic data that is used in the Monte Carlo probability simulation eValue FE Market Assumptions Whilst the CAP Link model is stochastic the outputs from the CAP Link model are also used in other areas of the tool in setting the assumptions for some of the deterministic projections throughout the tool the Performance Slider and in places where a high central and low estimate of investment returns is shown Hame Towers Watson Market Assumptions Central High Low i Cash Fixed Interest bl Property i UK Equity Developed Markets Equities i Al Emerging Markets Equities Above Assumptions Include Yield E Yield Data Dividend Interest Yield Yield Lol o Fixed Interest lad o Property o UE Equity LJ o Developed Markets Equities la o Emerging Markets Equities 4 Create Select Investment return assumptions can be defined in Voyant using a fix
46. perty Commercial property being offices warehouses and shops Investments that pay a fixed income such as bonds offered by the government Fixed Interest or corporations UK Equity Shares in companies listed on the UK Stock Exchange Shares in companies on stock exchanges outside the UK The countries Developed Markets involved will have high standards of control and regulation such as the US Equities Europe and Australia Shares in companies listed on stock exchanges outside the UK The countries Emerging Markets involved will generally be fast growing and may have a less mature market Equities structure for trading of stocks and shares The market assumptions are used in the eValue FE CAP Link model You are also able to create your own market assumptions for the asset classes above and add further asset classes for use in the tool If you do this then the tool will not be consistent with the eValue FE CAP Link model What is the eValue FE CAP Link model eValue FE run and maintain a model called CAP Link which is used to project multiple simulations of equally likely future economic market projections The model is stochastic because it produces lots of equally likely scenarios rather than a single deterministic forecast The model is driven by many assumptions which are set by eValue FE and are revised at least quarterly Each simulation of the CAP Link model is a potential economic scenario F
47. r plans that use an Asset Allocation that has been modified since the client record was last saved the Update Asset Allocation screen is displayed Update Asset Allocation Model Portfolio A Asset allocation Model Portfolio A used by planis in this client record has been updated by its creati E JTwo37T5 axra_proxied since this record was saved The version of khe allocation currently used by the plan was created on 11 10 2010 while the latest version was created 21 10 2010 Should all references to this allocation in all plans be updated to reflect the latest version of the allocation or be kept as is Click Update below to change all references to the updated allocation on the right or i Click Don t Update to keep the existing asset allocation as displayed on the left Click Update All By Creator to update all references to allocations created by JTwo375 axa_proxied Click Update All Remaining to update all allocations that have been updated since the client record was created Mote You can always undo this process by opening the client again without saving any changes l Existing Allocation Updated Allocation 1 poo ka Cash e Cash F tal Fixed Interest ia Fixed Interest 5 lad Property ia Property ff UK Equity i UK Equity g lad Developed Markets Equities lal Developed Markets Equities g Emerging Markets Equities i Emerging Markets Equities Central 7 23 Central 7 14 4 100
48. raeaiiniinenan E EE E Ea tees 37 Po S aaron ee A E E 38 Mome Calo Probabili y sonense a EEE E A 38 Cp OSS LF OI OO oe a E E E E E E E 38 EEEa ei O n i A E EE A A E E E E E A E 38 TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document iveyant Elevate Introduction The purpose of this guide is to provide a technical overview of the Voyant cash flow tool highlighting the differences from the standard Voyant tool and the Voyant tool where access is supplied by Elevate It also highlights particular features that may be useful when using the tool Within this guide all references to the tool are to the version of the Voyant cash flow tool where access is provided by Elevate unless otherwise indicated Neither AXA nor Elevate is responsible for the tool its availability or its performance You should ensure that you have read and understood this guide before using the tool especially Part 2 Important considerations when using Voyant cash flow tool The tool is designed to enhance your client s understanding of and engagement with financial decision making through a collaborative approach It will provide Elevate users with cash flow modelling needs analysis and goal planning combined in one interactive tool It also has t
49. rd functionality If you are using your own market assumptions these should also be gross of tax Market Assumption ranges Whether you are using the eValue FE or your own market assumptions you should be comfortable that the range shown for each asset class is appropriate TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document Elevate As the high to low range is specified at an asset class level it will not take account of correlations between the returns over different asset classes when a weighted average range is calculated for an asset allocation The impact of this is that the weighted average ranges will be wider than if these correlations were accounted for both for the low return values and the high return values You should be particularly aware of this in considering whether the high value calculated is appropriate for a particular client s asset allocation Please also refer to the section on Further Information TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document wiVEYan t Elevate Part 3 Importing Alter
50. s Investments Pensions gt Money Purchase Time ee mamn 7 Expand the Asset Load Asset Allocation Allocation panel and R Jane Asset Allocation click the Load button Melel Parthelia Ai lad Cash o Risk Profile L Cash lal 25 Fixed interest From this library you Risk Profile LO Very Aggressive fa o Property Risk Profile 2 Cautious oo ewan Risk Profile 3 Cautious zs Eat may select and load the Risk Profile 4 Cautious Balanced Eo Deweloped Markets Equities Risk Profile 5 Balanced E Emerging Markets Equities asset allocation Risk Profile 6 Balanced m ER Cortral 723 Risk Profile 7 Adventurous 100 Allocat High 11 69 Fisk Profile 6 Aggressive Low 27 45 Risk Profile 9 Aggressive Iner st nc 25 Dividend inc 1 56 Hame Model Portfolio 4 Creator JTwo37Siax0_promied User Last Updated pon Oct 11 2010 02 56 PM TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document siveyant Elevate How to Provide Asset Allocation to Voyant for Inclusion in a White Labelled Rebranded Version of the Software Firms subscribing to Voyant s optional white labelling service can have asset allocations added to their rebranded vers
51. ts to contribution handling are on the development queue at Voyant It is possible to enter any level of ISA contribution but the tool applies contribution limits when constructing the cash flow analysis These limits are currently assumed to increase by 500 every two years for the Stocks and Shares ISA and by 300 every two years for the cash ISA TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document Elevate Tax and NI Tax on Bank and Building Society interest is displayed as a withdrawal Reinvested dividends are included in income tax calculations even though they are not actually received Income tax allowance bands are assumed to escalate at 4 p a When a client moves from one tax band to another part way through a year Voyant estimate when this occurs and adjusts the tax paid accordingly The temporary anti forestalling rules to restrict pension tax relief for high income individuals due to end in 04 2011 have not been built into the tool National Insurance contributions are always calculated on an employed basis The National Insurance upper and lower limits are assumed to increase in line with the Personal Allowances Increase 4 per annum IHT and Trusts A breakdown of the
52. ty UE Equity Developed Markets Equities client records created in Voyant expand the Market cae es eel ee Om on Om ma co o so Assumptions panel in the System Preferences section of co maf rs M D on wo Woe m e h i so D A the screen 1 19 20 79 2 11 Emerging Markets Equities Above Assumptions Include Yield E Yield Data 3 Click the Select button on the Market Assumptions ne Dividend Interest panel shown right Yield Yield Leal o Fixed Interest _ Property O UK Equity The Load Market Assumptions dialogue shown below will E o Developed Markets Equities display A library of market assumptions will be listed along o Emerging Markets Equities the left side of the dialogue including the set loaded previously Description in step 1 of these instructions Create 8 select TECHNICAL USER GUIDE correct 10 2010 Voyant Inc 2010 Voyant Inc proprietary information which is privileged confidential or subject to copyright belonging to Voyant Inc Use of this information is solely for the recipient of this document ant ee Elevate 4 Select a set of market assumptions from the library When a set of market assumptions is S selected details about these Load Market Assum ptions assumptions will be shown in the cere P Jane 2 Market Assumptions Hame MW Market Assumptions dialogue Market assumptions are IPT alge alec Creator
53. ussdsedaiavsseceansdeacddnneceindsddauabswacsuaueademencceandedsawaswiudle 17 A e cts tec oe tas rare A T E E E E E A A E 17 ao E EE E E A A A A E E A E S E E E A A E A 17 Market Assumption TANG eisoes ES EE 17 Part 3 Importing Alternative Market Assumptions into The Tool sssssssesssssssssssssssssssssssrsrererererererrrreseesrrrrrrerreees 19 Features Disabled when Using Alternative Market Assumptions cccceccccceeeeeeeeeeeeessesseeeeeeeeeeeeeeeeeeeseaaaeaeeaenees 19 Two Options for Adding Alternative Market Assumptions to the tool cccccsssssseesesseeseeeeeeceeeeeeeeeeaaaaeeaegeeeeees 20 Two Options for Adding Alternative Market Assumptions to the tool ssesssssssssssssssssssssrsrerereesssssssssseesesseerereeee 21 Define Asset Classes and Returns in a Market Assumptions File ssssseeneessssssssssssssssssrerrrrreressssessssssssseeeerreeee 21 How to Format a Market Assumptions Pile osc ons cssescsecceueenccacncceenced i EEEa 22 How to Manually Load a Set of Customised Market Assumptions into the tool cceeeecccccceeeeeeeeeeeessseseeeeeeeeeees 23 How to Provide a Preferred Set of Market Assumptions to Voyant for Inclusion in a White Labelled Rebranded Version of the Software ccceccccccccceeeesssnssesseseseeeeeceeeeeeeeeeeeeeeaaaeeesesseeeeeeeeeeeeeeeeeeeeeaaaaagaassees 29 Part 4 Adding Asset Allocations to The Tool siceccscsicssacscaccinsanicasticesstanaehinesaiesipsinlacacdsespsasisgendsiscunabec
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