This announcement follows the launch of Allianz Retire+ Australian market-first solution, Future Safe, in March 2019. Future Safe is designed specifically for retirees and offers a simple way to access growth via returns linked to the sharemarket, with inbuilt downside protection to assist with managing the effect of sequencing risk on retiree portfolios.

In partnering with Investfit, Allianz Retire+ has the ability to offer financial advisers a portfolio construction tool that demonstrates how Future Safe can be effectively combined with other investments to provide greater certainty of outcomes. It also allows advisers to offer clients a higher degree of overall confidence when setting their individual retirement goals, with a more realistic understanding of what income they will be able to draw over their expected lifetime.

Jacqui Lennon, Head of Product and Customer Experience, Allianz Retire+ commented: “What we know is the number one fear retirees have is running out of money, in fact, they fear that more than death. So that is the number one risk we need to manage”.

“Traditional advice is often modelled against expected average investment returns, which offer about a 50% chance of achieving the projected retirement outcomes. That’s 1 in 2 clients that will have an outcome worse than what was presented. This tool is completely unique in its ability to offer advisers an extremely accessible way to give retirees greater peace of mind, while improving adviser efficiency in producing almost instantaneous results for hundreds of portfolios”.

Commenting on the partnership, Investfit Founder and CEO, James Claridge stated: “We are particularly delighted to be partnering with Allianz Retire+, an innovator in retirement funding and backed by global powerhouse, Allianz. The Team at Allianz Retire+ have developed Future Safe, a solution that enables retirees to continue to gain exposure to returns linked to Australian and Global shares whilst limiting the downside risk, which might otherwise threaten their retirement outcomes. We appreciate that Allianz Retire+ have chosen Investfit as their preferred tool to help advisers deliver great outcomes for their clients”.

Future Safe projections at different confidence levels

In recognition that advisers need to solve for portfolio longevity with adequate growth exposure and meet client confidence demands, the Investfit tool shows how Future Safe can be combined with other investments to generate potential returns for a client for a given level of short term risk. Investfit’s stochastic modelling runs portfolio simulations based on various inputs regarding financial position and goals – such as age, asset allocation, legacy and life expectancy – to a desired level of confidence. While the default for Future Safe simulations is set at 90% confidence, it also has the flexibility to be compared at 95%, 75% or 50% confidence that individual retirement goals will be met. These confidence levels are an estimate only given all financial projections used in the tool are based to some extent on historical data and therefore subject to uncertainty as the future may well be different to the past.

However, unlike traditional portfolio construction methods, Investfit leverages sophisticated technology to allow for variances in investment returns from year to year and takes into the account the fact it is not unusual to have a sequence of poor returns over a number of years. Investfit projects these variations and also takes into account the correlations between interest rates, inflation, property prices and share prices — that is, the tendency for them to move together or in opposite directions. Investfit also allows advisers to model a large number of possible strategies, rather than just the one that has been selected by default or based on a subjective “risk” questionnaire.

Lennon added: “Our Future Safe Investfit illustrations show modelled projections across over 1000 scenarios including selected income drawdown rates at a chosen level of confidence. This then arms advisers with projected data to demonstrate the impact of adding Future Safe into retirement portfolios to assist with mitigating sequencing risk, meaning retirees have higher confidence that they won’t run out of money”.

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Co-founders of Investfit, James Claridge ,Gavin Daw, and Ed de Salis

A new online application for financial planners and advisors has been launched into the Australian market, which can provide clients with a material uplift in retirement savings – potentially in the hundreds of thousands of dollars.

Investfit uses sophisticated predictive analytics to maximise financial goals, such as retirement income, by simulating a person’s financial future using technology that crunches billions of calculations in real time.

VC firm Sapien Ventures, spanning Silicon Valley, Australia and Asia, led a $1.5 million Series A funding round to back the company. Investfit now plans to build sizeable market share across Australia and expand into the Asia and US. Through Sapien’s connections, Investfit will be used by BMY Group, the leading Asian financial services group servicing the Chinese speaking Australian segment.

It’s the first time such powerful computing has been made available to advisers, planners and fund members. Using an individual’s profile and their investment goals, the mathematical algorithms within Investfit optimise financial outcomes and identify the best investment strategies. Investfit can simulate thousands of different investment strategies and identify the one that maximises retirement goals given the client’s circumstances. For planners and advisors, it eliminates guesswork and time spent para-planning.

After one year piloting a corporate version of the technology with AMP, founders Ed de Salis, James Claridge and Gavin Daw realised it could be applied to benefit individuals – with the potential of huge benefits to pre- and post-retirement goals.

“While automation in the industry is reducing costs and digital tools such as robo-advisers can invest our money cheaply online or generate an SoA, automation itself doesn’t materially benefit the client – whereas better quality advice does,” said de Salis.

“A client is more likely to have a positive experience with their adviser if they can be more confident of leading a better lifestyle after the advice.

“Many Australians will run out of money early in their retirement. Because they have the wrong strategy in place (super or non-super) they will leave money on the table and run out of funds much earlier.

“Investfit solves this problem through technology that helps advisers and their clients make better informed decisions along the way. For those who don’t currently use an adviser, Investfit can show the very real benefits of getting advice,” he said.

Mortgage Choice Financial Planning is the first dealer group in Australia to license the software.

CEO John Flavel said that “outcomes-based” advice was the way the industry needed to head.

“Investfit’s technology gives our advisers the holy grail of tools to help them give advice that maximises outcomes for our clients,” he said.

“Key to a profitable advice practice is lowering the cost of client acquisition and advice delivery, and Investfit achieves that in spades. Ultimately it’s about delivering high-quality advice and we can now complete the client fact-find to reporting process in a fraction of the time.”

Fortnum Financial Group is piloting the technology through Priority Advisory Group, an authorised representative of Fortnum. Neil Younger, Fortnum Group CEO said that “Advisers need tools that enable advice quality supporting outcomes for clients and add efficiency to the advice process. This could deliver a big competitive advantage for our authorised representatives.”

Adviser Zvi Teichtahl of Priority Advisory Group said: “Investfit’s optimisation function gives me the analytics to support high-quality advice – with high levels of certainty. We can rigorously model sequencing risk to answer the question of how much a client should allocate to each asset class to maximise retirement goals whilst protecting these goals from excessive market volatility. It is good compliance practice because the tool “risk-profiles” clients based on their tailored objectives, and models a huge number of possible investment strategy alternatives for the client. It also provides a deeply engaging process that the client can get enormous value from.”

Investfit is also targeting its solution to the industry super funds, who are looking for ways of engaging and retaining members. Because it caters to scaled advice, Investfit can give members access to simple advice, such as: where to put their money, how much to salary sacrifice or what their projected retirement income is going to be. Investfit calculates future eligibility for the age pension and includes this in its calculation of the best retirement income for the client. It also includes all assets of the client and can be used for singles or couples combined.

Founder James Claridge said Investfit overcame the shortcomings of current financial advice, which was normally produced using spreadsheets.

“One of the aims of Investfit is to address technical shortcomings in the industry that arise out of current modelling and calculators that assume fixed investment returns into the future rather than modelling the very real variability that we see in market returns. These spreadsheet models do not provide information about the certainty of a client achieving their retirement goals” he said.

“Traditionally the industry pigeon-holes clients into investment strategies according to “risk buckets” from conservative to aggressive, none of which are necessarily optimal for the client. That’s where processing power comes in. Serious processing grunt is required to crunch the billions of calculations in real time – impossible to do in a spreadsheet.”

Mr de Salis said Investfit had the potential to be a real game changer for the entire financial planning industry.

“Advisers can now provide strategic and investment advice to a prospective client and show the hard dollar value of this advice. For industry funds, it’s about engaging members by delivering high-quality, scaled advice that can be self-directed”.

“It becomes a compelling proposition where advice may add 5 or even 10 years to the life of someone’s investments. The bottom line is, less or zero reliance on the government pension, a far better financial outcome for an individual or couple.”

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