| Strategy ID |
Section |
Strategy |
Description |
| 25 |
Investment portfolio |
Dollar Cost Averaging |
Dollar cost averaging is not generally not optimal. However, advisers can use this strategy as a risk management tool. To recommend dollar cost averaging it must be done through the adviser pre-determiend strategy settings. |
| 26 |
Investment portfolio |
Retain existing investment platform |
Refer to PrimeSolve’s platform scoring system to review how products are compared and rated. |
| 27 |
Investment portfolio |
Exchange Traded Funds (ETFs) |
There are multipe portfolio construction options (review portfolio analyis step). The constraints set by the adviser or advice group will drive how the optimisation engine generates the optimal portfolio. Examples of when exchange traded funds typically may be optimal is if the adviser is looking to generate exposure to a certain theme, they are seeking a passive investment approach and/or they are looking to keep costs down. |
| 28 |
Investment portfolio |
Portfolio construction and management |
The investment management style is driven by the constraints set by the adviser at the portfolio analysis step. |
| 29 |
Investment portfolio |
Asset Allocation |
The recommended asset allocation depends on the target allocation of the established risk profile as well as how much the adviser is willing to allow the current asset allocation to deviate from the target. |
| 30 |
Investment portfolio |
Dividend re-investment |
Depends on competing cashflow requirements such as debt servicing obligations and other expense related items. |
| 31 |
Investment portfolio |
Superannuation Platform |
Refer to PrimeSolve’s platform scoring system to review how products are compared and rated. |
| 32 |
Investment portfolio |
Hedge against market risk |
PrimeSolve tracks value at risk (see portfolio risk). If value at risk is outside prescribed boundaries, in some circumstances it may be optimal to apply a short term hedge against market risk rather than trigger CGT implications that may arise from portfolio rebalancing. This is particularly relevant for any client/s who may be nearing retirement and able to rebalance more tax effectively in the near future. |
| 33 |
Investment portfolio |
Hedge against overweight asset position |
If client/s has an overweight portfolio position and it is preferable to sell the asset over multiple periods to reduce the CGT impact. This may occur when a client/s is moving into retirement phase and it is preferable to rebalance when CGT can be managed more effectively. Another optimal scenario could be to build up unused concessional contributions and trigger gains in a year where accumulated offsets are available. |
| 34 |
Investment portfolio |
Drawdown approach (best performing asset class first) |
For clients in retirement phase, a Monte Carlo simulation can be run across multiple drawdown methods to determine the probability of funds lasting. |
| 35 |
Investment portfolio |
Drawdown approach (worst performing asset class first) |
For clients in retirement phase, a Monte Carlo simulation can be run across multiple drawdown methods to determine the probability of funds lasting. |
| 36 |
Investment portfolio |
Drawdown approach (proportional) |
For clients in retirement phase, a Monte Carlo simulation can be run across multiple drawdown methods to determine the probability of funds lasting. |
| 37 |
Investment portfolio |
Drawdown approach (classic bucket – defensive first) |
For clients in retirement phase, a Monte Carlo simulation can be run across multiple drawdown methods to determine the probability of funds lasting. |
| 38 |
Investment portfolio |
Protected equity investment |
Optimality depends on the project uploaded. Expected return, percentage of investment that is tax deductible and servicing costs drive whether this will be recommended or not. Generally, due to high management costs a protected equity investment is only optimial under one of the following scenarios; |
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- Client needs growth but wants a guarantee they can’t lose money
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- Client has an aggressive risk profile and wants to maximise LVR and product can be accessed with no money down.
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- Client has a CGT issue in current financial year and a pre-payment of interest in a gearing product would assist in reducing taxable income this financial year.
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| 39 |
Investment portfolio |
Purchase investment property |
Depends on rental yield, access to leverage, growth rates and acceptable level of diversication per risk profile. |
| 40 |
Investment portfolio |
Purchase commercial property |
Depends on rental yield, access to leverage, growth rates and acceptable level of diversication per risk profile. |
| 41 |
Investment portfolio |
Invest in a SMA |
Depends on preferred investment management style and required client features. If client wants active management and/or access to specialist fund managers this option can be triggered. Refer to portfolio analysis step for more detail. |
| 42 |
Investment portfolio |
Invest in a IMA |
Depends on preferred investment management style and required client features. If client wants active management and/or access to specialist fund managers this option can be triggered. Refer to portfolio analysis step for more detail. |
| 43 |
Investment portfolio |
Sell assets |
An asset sale will occur due to one of the following reasons: |
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- Re-align asset allocation closer to risk profile
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- Re-align portfolio closer to the desired model porfolio (see portfolio analysis step)
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- The optimisation engine is attempting to satisfy a relevant portfolio constraint (see portfolio constraints).
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- Capital is required to fund lifestyle and/or goals
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- Capital is required to fund other opportunity such as investment property, reduce debt etc.
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| 44 |
Investment Portfolio |
Transfer existing asset holdings into an IMA |
If an IMA is recommended, the optimisation engine is able to identify if any existing assets are available to transfer in-specie to the IMA. |
| 45 |
Investment Portfolio |
Transfer existing assets into a SMA |
If an SMA is recommended, the optimisation engine is able to identify if any existing assets are available to transfer in-specie to the SMA. |
| 46 |
Investment Portfolio |
In-specie tranfer (platform) |
If an SMA is recommended, the optimisation engine is able to identify if any existing assets are available to transfer in-specie to the platform. |
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