Spotlight on… Ortec Finance

Goal-based financial planning has increased in popularity. Why has it become the most effective way to ensure successful outcomes for HNWIs, and why is technology a vital element?

In our recent “Spotlight On…” webinar these questions were answered by Dominic Snell, Product Strategy Director at Wealth Dynamix, and Iwan Schafthuizen, Managing Director of Business Development at Ortec Finance.

Why is goal-based financial planning a more client-centric approach to managing wealth?

Clients don’t always link investment strategies to personal goals. Instead, investment plans are usually driven by the responses provided on initial fact-finding questionnaires. However, when encouraged to focus on life goals, and understand the correlation between portfolio performance and goal achievement, clients are more satisfied. 

With goal-based financial planning, wealth managers work with clients to manage risk over time. Retirement planning is not the sole focus; saving for children’s education, buying a second home, or investing to sustain a lifestyle also come into play. Monitoring the short-term risk of investment portfolio fluctuations is important. However, this traditional approach of measuring performance against standard benchmarks must co-exist alongside a continuous assessment of the risk of failing to achieve the client’s financial goals in the long term. Clients are demanding greater value from fees, and wealth managers are looking for new ways to drive value through a richer client experience. Goal-based financial planning includes a solid mix of online client-facing tools for monitoring performance versus goals, combined with the expertise to advise clients when adjustments are needed to keep investments on track. 

How does technology support goal-based financial planning? 

Traditional, manual financial planning processes are time consuming. Some clients receive detailed plans, while others don’t. Most financial plans are static, and reviews are infrequent. It is difficult—if not impossible—to provide high quality, client-centric service for every client.

Technology-enabled goal-based planning supports a more dynamic, real-time, and scalable approach. Data is captured electronically, aggregated, and then presented to the advisor via graphical dashboards that make it much easier to assess current performance and next best actions. Clients engaged in goal-based planning are more open and willing to reveal information that provides the advisor with a 360-degree view of their requirements. By equipping advisors with the tools to onboard clients and establish goal-based investment plans quickly and easily, investment products can be aligned with clients’ goals over time, which builds trust. Technology enables advisors to monitor goals and prioritise clients daily, according to whether their portfolios are on track, or not. 

Advisors have more time to improve client experience and are provided with a single client view, which enables them to evaluate the client journey as it cuts across multiple phases and functions. 

During COVID-19, when the market dropped by 25%, clients asked: “Can I still retire at my preferred age? How feasible is that now?” Many clients were tempted to de-risk, however technology-enabled advisors were able to provide timely insights into the trade off between risk and return, which built client confidence in their ability to advise appropriately.

What influence does a client’s knowledge, education and experience have on retention rates?

Clients who don’t understand the impact of changing their risk profile are more likely to switch advisor. They don’t differentiate between level of risk and opportunity to achieve greater gains. To increase client engagement advisors must explain how proposed strategies and products map onto the risk appetite of the client, and their personal goals. 

Next generation investors are much more engaged when they are educated and can access real-time assessments of portfolio performance versus goals. Goal-based plans that report the likelihood of attaining each goal via traffic-lighted dashboards are especially effective in encouraging members of different generations to remain loyal to the family wealth manager—it is more than just a case of amassing wealth. 

How is financial planning likely to evolve in the future? 

Clearly, the future of financial planning requires technology to deliver high-quality advice at scale. The use of data to drive timely insights is essential but, in the end, it is all about cost efficiency and bridging the advice gap. Simply put, wealth managers must embrace technology to switch from serving only a portion of their clients effectively, to delivering a goal-based financial planning experience for all clients in a smooth and efficient way.

The only way to achieve this is through automation of the end-to-end client journey, which enables advisors to focus on personal interaction with the client. From client acquisition to re-engagement, technology can transform everything from back office operations and compliance, through to monitoring and client communications.

Successful wealth managers will leverage technology to amplify the human component and put every client front and centre of the investment planning process—back where they belong. 



Wealth Dynamix delivers Client Lifecycle Management solutions to the world’s leading private banks and wealth and asset management firms.


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