Meet the Characters:
Andrew (Young Professional) & John (Financial Advisor)
Meet Andrew, a young professional, and John, a financial advisor who wants to help Andrew make the best possible decisions for his financial wellbeing!
John is a newly independent financial advisor who overcame numerous obstacles to grow his book of business. Limited resources, manual tasks, and time constraints posed significant challenges for him since leaving a major wirehouse. However, everything changed when John discovered the power of VRGL. Since incorporating VRGL into his prospecting process, he's experienced an acceleration in time to generate new revenue. Let's explore how John leveraged VRGL to impress Andrew, a prospect, and secure his business.
Andrew's Wealth Planning
Andrew is a 28-year-old professional residing in Austin, Texas. As a dedicated Google employee for several years, Andrew has built a portion of his net worth in Google stock thanks to his employee stock compensation plan. When it comes to securing his financial future, Andrew's committed to setting aside $2,000 per month, with the goal of accumulating $5 million for his retirement by the time he reaches 65. To date, Andrew has relied on a robo-advisor to manage his investments, with a preference for technology and large growth companies and funds. However, the performance of his portfolio took a hit in 2022, and without the guidance of a human advisor to address his concerns, Andrew decided it was time to initiate an initial chat with John at WealthWise Advisors to ensure he was on the right path.
Intake | Statement Extraction
Thanks to VRGL's statement extraction feature, John efficiently extracts all the necessary information from the robo-advisor's statements, allowing for a comprehensive analysis of Andrew's investment portfolio. Initially, Andrew brought his most recent brokerage statement to John, which VRGL seamlessly parsed, extracting all relevant holdings and transactions details. Since many of Andrew's employee stock holdings don't adhere to the standard statement format, VRGL accommodated John by enabling manual entry of quantities, amounts, and other valuable data for those holdings.
Educate | Analytics
With VRGL's 5 Pillar Analytics, John begins to assess Andrew's current portfolio and develop a strategy for his proposed allocation. With VRGL, John is not only able to explain and assuage any fears of past performance, but also project future scenarios and plan for unforeseen circumstances. Below are some key insights that John was able to quickly identify, the recommendations he would make, and how the proposed strategy will impact Andrew's financial trajectory.
John explained to Andrew that his plan to invest $2,000 per month for retirement, while a good start, might not be enough to reach his $5 million retirement goal, even in a very positive market scenario. John suggested that Andrew explore other ways to save for retirement, like company-sponsored 401(k)s and IRAs, which could help increase his monthly savings and get him closer to his financial goals.
John also discussed fees with Andrew, where they reviewed the total fees that were associated with his current portfolio. Andrew was surprised to discover the extent of ETF expenses he had been indirectly covering, in addition to the 0.35% robo-advisory fee. To help reduce these costs, John suggested a straightforward approach: investing in low cost ETFs or direct positions.
Upon reviewing the portfolio's performance, John noted that, despite a lower return in 2022, the portfolio did reasonably well in 2023. However, the primary issue with the portfolio was its significant concentration, particularly in technology stocks. Given Andrew's inability to sell his Google shares due to employee stock compensation rules, John suggested reducing the allocations in other high-weight holdings, such as Apple, Uber, and Tesla. He also recommended diversifying by adding index-tracking funds to lower the overall portfolio risk.
Lastly, John pointed out the vulnerability of Andrew's portfolio by illustrating potential losses in various historical scenarios. Because of its concentrated nature, Andrew's portfolio had underperformed the benchmark during events like the Financial Crisis, the Covid Crash, and Q4-2018. To alleviate Andrew's concerns, John assured him that through diversification and risk reduction, the portfolio would become more resilient during market downturns, similar to the one in 2022, and experience less volatility.
Generate | Proposal Management
With John's investment plan, Andrew gains confidence in the new strategy. Using VRGL, John generates a fully white-labeled formal proposal that includes data-driven insights and visualizations, providing a clear picture of the current portfolio and how it would be positioned going forward. This proposal quantifies the improvements Andrew can anticipate with John as his advisor. Impressed by the straightforward approach and the easy-to-understand visualizations, Andrew gives the green light for John to start transitioning his portfolio.
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