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RiXtrema Integrates Risk Analytics With Retirement Planning

Submitted by Technology Tools for Today on November 14th, 2014


"RetireRisk" Helps Advisors Enhance Value to Clients

RiXtrema today announced the introduction of "RetireRisk," a new tool that advisors can use to combine institution-quality risk analytics with retirement planning. The first of its kind, the tool enables users to see the results of RiXtrema's Portfolio Crash Test and also measure the impact of losses on the investor's long term retirement goals.

"Risk tools have historically been focused on risk tolerance, which is the subjective willingness to take risk, but have ignored goals, or the objective ability to take risks," said RiXtrema President Daniel Satchkov, CFA, in Atlanta to speak at the T3 Enterprise Conference at the Hilton Atlanta Downtown, Nov. 12. "RiXtrema's combination of risk tolerance measurement with the crash rating and estimation of impact on long term return goals with the financial planning tool provides the best way to integrate risk into advisory practice.

By using "RetireRisk" in conjunction with RiXtrema's Portfolio Crash Test, advisors can measure the impact of losses on the client's long term retirement goals. This will enable users to compare long term projections among a number of portfolios to determine which one best suits the client's needs.

RiXtrema conducted a soft introduction of "RetireRisk" to several advisors who currently use the firm's crash test software. The response was extremely strong, with six advisors signing up on the spot. Tom Doherty, CFP, founder of Half Moon Financial Planning LLC in Kingston, New Hampshire, began using RiXtrema Portfolio Crash Test software earlier this year. "In just a few months of using RiXtrema, it became an essential tool for my design and communication of risk appropriate portfolios for the varied needs of my clients," said Doherty. "The 'RetireRisk' tool, with a direct tie-in to the retirement planning process enables me to show clients simply and clearly how various potential events could impact their ability to meet their retirement goals. Providing them with a clearer understanding of the risk/reward tradeoffs and impact of time enhances my ability to manage their resources and serve their needs."

In his T3 presentation, "The Future of Risk is Here: Enhance Your Value or Perish," Satchkov drew a parallel between the developments in risk management and the developments in both social networking and in biotech. While all are happening quickly and all require a relentless end-user focus, the similarities between risk management and biotech are rooted in the critical aspects of scientific rigor and peer reviewed research. Referencing several of the leading robo investment platforms, Satchkov highlights the scientific and educational credentials of their team members. "In the face of the robo revolution, advisors must prove value in order to sustain their businesses," said Satchkov. "They need tools and solutions with scientific credibility – nice apps that provide easy numbers are inadequate if we are to truly serve the clients' best interest."

The availability of quantitative risk technology became possible through advancements in computing power, per Moore's Law (which originated with Intel Co-founder Gordon Moore who observed that the number of transistors per square inch doubled every 18 months.) The ongoing revolution in technology will force advisors/reps to redefine the value that they offer by including quantitative risk management in their workflow. Not only must the management tool be scientifically credible, it must also be linked to retirement goals.

"There are many building blocks of financial and retirement planning, and all must be factored into risk management," said Satchkov. "Planning is where the financial advisor can put a stake in the ground, as the robo platforms don't provide this," added Satchkov.

ABOUT RIXTREMA
RiXtrema, founded in 2010, is a portfolio crash-testing company that helps advisors discuss risk with clients. Long used by fund managers, pensions plans and funds of funds, RiXtrema has introduced its risk management tools to the financial advisory and broker/dealer community to help ensure that clients get the analysis and advice they need. For more information, visit www.rixtrema.com.

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