ENTERPRISE RISK SOLUTIONS B&H Wealth Scenario Generator (US Edition) The B&H Wealth Scenario Generator is a stochastic projection engine for modeling investment products and cash flows, designed to support retail investment advice and financial planning. It is used within client applications: advice tools, suitability assessment, defined contribution (DC) pension planning portals, product comparisons, what-if toolsets, and direct-to-consumer platforms. The economic data used within the B&H Wealth Scenario Generator is created using the award-winning B&H Economic Scenario Generator. The Challenge: Mapping Client’s Financial Objectives, Risk Profile, and Capacity for Loss Although most financial advice processes consider risk attitude, many have failed to take appropriate account of the client’s specific financial needs or capacity for loss. A main reason for this is that advisors have not previously had the tools to help them illustrate to clients the potential loss in terms that that they can easily relate to their financial needs. However, with retail financial market regulators now focusing on suitability and capacity for loss, product providers and advisors are responding to the regulation by seeking new ways to communicate risk in investment products to retail customers. The Solution: Sophisticated Stochastic Modeling for Financial Planning Unlike other financial planning tools used in the wealth management sector, the B&H Wealth Scenario Generator captures all capital market risk factors required to illustrate the likely range of financial outcomes, for any given investment strategy and cash-flow profile. This allows advisors and customers to compare the risk and return of different investment options in the context of their own financial needs and risk profile. POWERING A WIDE RANGE OF FINANCIAL PLANNING AND ADVICE SOLUTIONS Accumulation & Suitability Retirement Income Direct to Consumer Retirement Portfolio Analysis Retirement solution options Retirement options Expected death benefits Guaranteed value (£ pa) 100% Moderate £0 £13,900 Drawdown Cautious 30% Cautious £54,750 £0 Drawdown Balanced 64% Balanced £82,200 £0 Drawdown Growth 79% Moderate £101,900 £0 Drawdown Adventurous 83% Adventurous £127,050 £0 Annuity & Drawdown Cautious 57% Cautious £43,375 £3,200 64% Cautious £59,212 £2,500 63% Balanced £65,705 £1,750 Annuity & Drawdown Cautious Annuity & Drawdown Balanced Income sustainability Detail Risk tolerance Annuity INVESTMENT TERM (AGE) RISK TOLERANCE 75 years old Moderate Scatter chart Income comfort zone (£ pa) INCOME TARGET £5,000 MIN £10,000 £15,000 MAX Application Programming Interface (XML, API) B&H Wealth Scenario Generator Stochastic Asset Projections Investment Portfolio Modeling Product Rules & Cash-Flow Modeling Mortality & Annuity Modeling Forward-looking economic models Multi-Asset Portfolios Single, Regular Premium Standard & Configurable Multi-economy, Multi-currency Flexible Contribution Profiles Mortality Modeling Bases Product Cash-flow Rules Structured Products and Guarantees Flexible Annuity Pricing Options Assumptions documented Funds of Funds, Multi-Manager Diversified Growth Funds Global coverage of economies and asset classes Lifestyle Asset Strategies & Target Dated Funds Alternatives, Emerging Debt, Commodities, Infrastructure and Hedge Dynamic Asset Allocation/CPPI With Profits Variable and Asset-Linked Equity Release Tax & Lifetime Allowance Flexible Charge Structures Asset & Economic Modeling Layer Asset Returns Interest Rates Inflation MOODYS ANALYTICS B&H WEALTH SCENARIO GENERATOR (US EDITION) Currency/FX Mortality The B&H Wealth Scenario Generator powers many of the leading web-based financial planning, retirement and investment decision support tools. The B&H Wealth Scenario Generator Helps Advisors Address Advice and Suitability Challenges With the B&H Wealth Scenario Generator advisors can: »» Access dynamic what-if analysis—compare different financial planning options, alternative investment strategies, contribution or income levels and investment term. »» Capture all risk factors impacting client outcomes: asset prices, interest rates, inflation, and longevity. »» Assess investment suitability—illustrate potential loss, and align investment solutions with a client’s risk profile and financial objectives. »» Offer a value-added advice service utilizing an efficient basis for monitoring a portfolio against client needs using automated tracker alerts. »» Provide an objective basis to validate portfolio rebalancing and consolidation. »» Illustrate the impact of product features such as guarantees or target date glide-path. »» Calculate the likely contribution rate required to meet a financial goal. Benefit From Award-winning Economic and Investment Modeling Capability With the B&H Wealth Scenario Generator advisors have: »» Institutional-quality economic scenario generator capability. »» Quarterly updates to economic assumptions, consistent with current market prices and market conditions. »» A wide range of assets modeled consistently across multiple markets, including real estate, alternatives, hedge, commodities, infrastructure, and emerging market debt. »» A multi-currency, multi-economy model which supports advice and planning solutions in any market or currency. »» Support by Moody’s Analytics global financial economic research group. »» Comprehensive documentation of all models and quarterly economic assumptions. »» Ability to model a wide range of sophisticated product features: asset allocation glide-paths, constant proportion portfolio insurance, guarantees, investment-linked and variable annuities. »» Modeling functionality that can be configured for the advisor’s or product manufacturer’s own investment proposition and product terms. Integration and Deployment The B&H Wealth Scenario Generator has a fully documented application programming interface (API), designed to support easy integration with existing client services, platforms and toolsets. Our Implementation Services team help clients design and integrate their own planning solutions. Moody’s Analytics supplies the B&H Wealth Scenario Generator calculation engine and API, configured according to our client requirements. Clients may then create the end-user interface according to their own brand and user experience requirements. Alternatively, a number of solution partners have already integrated the B&H Wealth Scenario Generator into their financial planning propositions and platforms, powering stochastic analysis for their clients. CONTACT US Visit us at barrhibb.com or contact us at a location below: AMERICAS +1.212.553.1653 clientservices@moodys.com EMEA +44.20.7772.5454 clientservices.emea@moodys.com ASIA (EXCLUDING JAPAN) +85.2.3551.3077 clientservices.asia@moodys.com JAPAN +81.3.5408.4100 clientservices.japan@moodys.com Copyright © 2014 Moody’s Analytics, Inc. All Rights Reserved. MOODYS ANALYTICS B&H WEALTH SCENARIO GENERATOR (US EDITION) SP23003/101215/IND-IG