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Overview
OverviewThe main functions of the adviser settings are as follows:
1: Modelling settings
Model type: A user must select either a deterministic model and/or a optimised model type. If both are selected the engine will run both models for comparison purposes.
Simulation: Each model will automatically run a Monte Carlo simulation ..
Advisers can improve the model problem solve time by turning off the “Simulation”.
2: Advice levers
Outside of optimising the clients resources within the model there are a number of quick assumptions/levers the adviser can pull that will improve the advice model over their baseline projection. These include:
| Lever | Description |
|---|---|
| Reduce expenses | A reduction in expenses will increase the available resources to allocate to wealth building activities such as investment, debt reduction and/or superannuation contributions. How the additional resources are allocated will depend on whether you are running a deterministic or optimised model. |
| Investment return | An increase in investment will allocate additional funds to the model portfolio. |
| Increase debt repayments | Increasing debt repayments will increase the annual debt repayments. Non-deductible debt with the highest interest rate will be prioritised first. Once paid down, the next highest interest paid debt will be paid. |
| Reduce interest rates | A reduction in interest rates will be applied to all existing debts. |
| Increase salary | This can be applied to either client. The amount set will gross up the salary expectation. |
| Adjust risk profile | If an adjustment in risk profile is applied, then this will impact the expected investment return. |
| Increase superannuation contributions | This will increase the amount contributed to superannuation per annum. |
| Adjust retirement age | Adjusting the retirement age will determine how long salary will last within the model. Extending retirement will delay the drawdown period and result in equity lasting longer. |
| Adjust retirement drawdown | If this number is adjusted down, it has the impact of reducing expenses within the model. |
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