Models: create your own return scenarios
RightCapital gives you granular control over how you provide excellent advising to your clients. Part of this is the ability to see exactly what we mean by "Fed adverse year followed by modest growth". It also means being able to build your own custom scenarios to provided tailor-made advising.
For a brief overview of return scenarios watch this short video.
To access return scenarios, navigate to Advisor Portal > Models > Scenarios.
There are four existing return scenarios:
- Bad decade followed by slow growth
- Fed adverse scenario followed by modest growth
- Strong growth scenario
- Flat 0% return
By clicking on the name of each scenario, the exact values of each asset category in each year are displayed.
Most scenarios level off after 10 years. Slow growth resolves to a steady 2% growth; moderate growth is 4%; strong growth is 8%.
Create your own scenarios
To create your own return scenario, simply click Add Scenario. An item will add at the bottom of the existing scenarios named New Scenario. Simply click on the title above the return values to change the name. Then, adjust the values of each asset category in each year to build your scenario.
Don't forget to scroll to the bottom of the page (after year 30) and click Save.
Use custom Scenarios to illustrate sequence of return risk. Set up one scenario with a big drop in year 1 and consistent returns thereafter, and set up a second scenario with the same returns but a drop in year 10 instead of year 1. You can show your client how it impacts their projection.
Where to use return scenarios
Return scenarios are primarily used on the Comparison tab in Client Portal > Retirement > Analysis. For more details on the Comparisons tab, click here.
Once a new scenario has been saved, you can access it using the drop-down menu on Comparisons: