The coronavirus outbreak has been a sucker punch for every player on the market. Nobody could have anticipated such a risk. The virus has changed the way people perceive risk, and it has changed their appetite for risk. Clients tend to switch their risk preferences from 4 at the start of the year, then to 6–7 during the previous month, and then to 8 and higher now—which means literally “all cash.”
Some companies lose their clients and close offices during these times, while other companies find new opportunities and try to help people in every way they can. One such company is Totum Risk. In this article, you can find comments from Larry Shumbres, CEO at Totum Risk, on the market’s current situation, his predictions and plans for the future, and the company’s new pricing policy that will help financial institutions around the world.
How risk capacity scores can help
In situations when so much stress is swirling around and no one can predict how long it will go on, it’s important to stick to objective factors. Totum’s strength is that it doesn’t focus on emotional factors. Risk capacity is calculated based on myriad facts, which makes its evaluations less biased compared to its competitors.
Another way the risk tolerance tool can help advisors and financial institutions during the crisis is to protect them from ill-founded sues.
“Many investors sued their advisors and financial institutions during the 2009 financial crisis. Totum Risk can effectively protect them and is known to be one of the least expensive financial insurance options for advisors.”
The world is facing an unprecedented unemployment rate. Nevertheless, advisors should keep doing their part, and Totum is here to help with that.
“We’re offering our Pro Lite version for just $120 per year in addition to $100 off our Pro and Pro Plus subscriptions. We want to ensure that all advisors have access to an accurate risk management and portfolio construction tool during these uncertain times.
More integrations, more value
Totum Risk’s development team is continuing to enhance the product and add more integrations throughout the year. They are currently working on API integrations with Charles Schwab Openview Gateway, Fidelity Integration Xchange, and TD Ameritrade Veo One. They plan to add account opening when they push these upgraded integrations live.
Totum is also working with a few of the leading insurance companies to better score annuities.
“Outside of variable annuities, Fixed Index Annuities and other annuities have many variables that need to be taken into consideration to accurately provide a risk score.”
In 2020, Totum will integrate with more third party vendors. These include WealthBox, Salesforce, Albridge, JourneyGuide Planning, and they are waiting to hear back from Envestnet/MoneyGuide, RightCapital, eMoney, and Advyzon. These tools provide data that can help optimize the risk questionnaire by filling out some information automatically before clients even see it. A pre-populated questionnaire will enhance the client experience and allow the financial advisor to spend more time recommending a portfolio around the risk tolerance.
“Integrations are key to be able to pull data automatically on a daily basis. Our goal is to get to the point where we could eliminate the questionnaire altogether. With machine learning, the client can just enter their email, phone number, and name, and we provide them a risk capacity score.”
Together with CRMs, Totum wants to integrate with financial planning tools, which are predicted to enrich its back-end variables with the information for calculating a more precise risk capacity score. For example, the system will react to particular triggers or events and make changes in the risk capacity score, alerting the advisor that something has happened and needs attention.
“Financial advisors subscribe to Totum for portfolio construction, prospecting, and preparing a custom proposal for their meetings. Visually showing a prospect or a client how their portfolio compares to a recommended model from the advisor is incredibly powerful. Our clients are doing this to win more business. It’s that easy.
Totum Risk in growth mode
Totum Risk is always looking for different ways to improve its scoring, shorten the questionnaire, and provide its clients with more value for less cost. Today, that’s why the company is pedal to the metal when it comes to focusing on clients’ needs and growing. Here are new capabilities that Totum provides for its clients:
“We believe and our clients believe the risk questionnaire outcome is not the end all be all. An advisor may complete the risk process, complete a financial plan and realize their client needs to take on more or less risk than what Totum is showing them. In this case the advisor can adjust the risk preference score to be inline with the clients financial goals.”
Totum Risk strives to find new ways to add more value to its offerings, and it already has a range of advantages over its competitors: the ability to change preferences on the go, the huge number of variables in the scoring model, the focus on compliance, value, and business development, the increased communication with clients, and the low price, among others.