LDX Specialized Services
Practice Management and Ageing Demographics
ARM provides the most current statistical data related to the two major components of clients’ longevity that quietly eroding portfolios and negatively affecting advisory practices.
The data and the interactive risk assessment tools are critical components for evaluating how longevity affects portfolio performance based on extended lifespan, withdrawals and risk exposure and its potential for reducing the volume of assets under management for the advisor.
Advisor Book Shrinkage
ARM offers an effortless process to identify clients’ longevity risk exposure and specialized tools to accurately and efficiently measure the resulting reduction in portfolio assets and its effect on overall book revenue and book value. Clients’ longevity exposure is irreversible and a substantial risk to advisory practices that can only be mitigated by planning in advance.
Longevity Risk Assessment
ARM offers an interactive visual tool to measure the longevity exposure of any one client and its impact on their portfolio, using statistical data or the client’s own assumptions.
This capability is highly effective in shielding portfolio assets against considerable costs associated with living longer and ageing, resulting in improved asset and account retention.
Longevity Risk Mitigation
ARM present advisors with effective tools to stress test portfolios for the probability and the magnitude of longevity risk.
Should the assessment of any one portfolio result in a level of shrinkage that raises concern for that client, we offer a suite of interactive modeling tools that can help show how various loss mitigation options could lower or eliminate the impact on their investments. This process is critical for helping clients make informed decisions and a further opportunity to show case the advisor’s superior value proposition.
The analytical modeling tools encompass access to a propriety digital product fulfillment portal (if needed) to ensure a seamless risk management process.
Book Transition
The longevity risk assessment and risk mitigation tools provide the advisor with unique capabilities for evaluating the resilience of revenue stream and the stability of assets of any one portfolio and any one practice.
Over $50 trillion in invested assets are expected to be in transition over the next decade or so due to the longevity and ageing of investors. This can be a significant opportunity for new business acquisitions for some advisors and a considerable risk to account retention for others.
Whether the advisor is transitioning into a new book or out of an existing one, the ability to stress test the book for longevity exposure is invaluable in estimating the shrinkage and its resulting impact on the value of the book under consideration.
If the transition is into a book, the ability to predict and calculate the degree of its potential shrinkage is essential for finding the book’s real value and avoiding surprises.
If the transition is out of an existing book, stress testing portfolios can find the potential shrinkage, enabling the incumbent advisor to implement remedial actions in advance to strengthen the underlaying portfolios resulting in more revenue and maximizing the capitalized value of the book for the advisor.