Fi360 Solutions’ Decision Optimizer, which is configurable by enterprise, provides an interactive interface for an advisor to discuss and visually evaluate the merits of rolling over to an IRA or staying within the 401(k) plan. It results in a client-friendly report that documents this decision.
Initial Background Info
- After launching the Decision Optimizer app, select the “+ New Analysis” button on the right side of your screen.
- Select the appropriate Decision Framework from the dropdown box. Different options may exist based on your organization's setup but the most common is a Plan to IRA Rollover analysis.
- Enter an internal name for the Analysis and the Client's name.
- Enter a few more basic details about the client which will help when reviewing historical analysis data in the Business Intelligence application.
- Lastly, ensure you are asking the client for any documentation they can provide on their existing plan/ira/account. Use this section to record what the client actually provided.
- Click “Next” when complete.
You will now see all of the Decision Considerations that need reviewed with your client to arrive at an Overall Recommendation.
For each consideration that is part of the selected framework (they are 100% configured based on this selection) you will;
- Select the importance to client: From the client's perspective, how important is this consideration to them on a scale of Low, Medium or High. Some considerations may include an 'N/A' option which if selected will completely remove it from the calculation.
- Which option is best aligned with the client's preferences: The advisor should guide and educate the Client through any differences between the two options and how it applies to their situation so that they can determine which is best aligned. If there is no meaningful difference, you can also select a ‘neutral’ position.
- If applicable, the Investor's Needs and Current Account Features should be selected for each factor.
- What is the degree of difference between the two options: How much 'better' is the current option or proposed option on a scale of Low, Medium, High.
- For frameworks where fees are considered, you may also see an option to Compare Fees. When clicked, this will launch a modal to assist in this process. You can enter the estimated annual recurring all-in costs for both options if you have the data. If you don't have the data on a retirement plan, you can use benchmark data in it's place.
- To access the benchmark data, start by finding the plan within the DOL 5500 filings. Once a plan is selected, you will then get a benchmark cost % based on that plan's size and # of participants.
- To view a brief description of each factor (depending on framework and enterprise configuration) click on the 'Comment Box' icon.
Overall Alignment with Needs and Objectives
For each consideration, the combination of the above choices will result in it's weighted alignment to the overall recommendation. That is simply the importance multiplied by the degree of difference.
The line chart at the bottom of the page will adjust in real-time as you change any of the selections. The recommendation is calculated by comparing the sum of the weighted alignment for each option. This difference will be shown on the line chart and will be colored by the option with the highest alignment to the client's needs and objectives. So, as a given option looks more and more aligned with the client's needs and objectives, you will see the bar being colored more and more completely to that side.
Generating the client report
Once you’ve finished with the considerations, you can save and lock the analysis which now makes this analysis read-only for historical data integrity. You can download the analysis as a pdf to provide to your client and ultimately save in your files.