“Will I have enough?“
“How long will my retirement savings last?”
These are the two questions that concern consumers the most as retirement approaches. Nest Egg Guru’s flagship retirement spending app has unique design qualities and features that help financial advisors provide tangible answers to these questions in a way that no other software apps do increase client engagement and understanding.
What Separates Us From Our Competitors?
#1: It tells your clients not just the likelihood that their money will last, but how long it will last!
Most popular Monte Carlo simulation software used by financial advisors today (e.g., Money Guide Pro, Right Capital, eMoney, etc.) presents results in terms of probabilities of success and the percentages of portfolios that fail before the end of the retirement spending period. However, a limitation of this approach is that it doesn’t tell the whole story.
To make informed retirement spending and portfolio management decisions, consumers need to know if the portfolio may cause it to the end of the illustrated time horizon and the remaining balances along the way and at the end. For instance, a high “probability of success” may not be a good thing. A portfolio that “succeeds” most of the time may end with large remaining portfolio balances that may indicate that the client could have spent more and lived better in retirement. Conversely, simulation “failures” (the percentage of shortfalls) may not be a big deal if most of them occur close to the end of the time horizon, or they could signal the need for significant adjustments if they tend to occur long before the end of the client’s projected lifetime.
Nest Egg Guru is the ONLY software that presents its output of remaining balances in five-year increments across the full range of simulation results. Simply put, it allows consumers to see how much money they may have left and how long their money may last if the market conditions are average, below average, or historically awful. This functionality does not exist on any other software platform, but it is precisely the information your clients want to see!
#2: It builds client trust and loyalty by educating them and including them in the planning process.
Most popular planning apps are purely back-end or advisor-facing. The advisor inputs the client data, and the software spits out a lengthy, jargon-rich report with colorful charts and graphs to present to the client. The truth of the matter is that your clients will never read that document again after they leave your office.
Today, consumers are increasingly eschewing such one-sided engagement and prefer to be educated and included in the planning process. Nest Egg Guru’s retirement spending app is refreshingly different. It is 100% client-facing with a sleek, welcoming user interface. Instead of culminating in a lengthy report, all the apps in Nest Egg Guru’s planning app suite are intended to be run iteratively with clients to show them how changing different variables within their control may impact their outcomes. Your clients will appreciate the exercise’s educational value, and this two-way engagement will help endear them to you.
#3: Its elegant simplicity.
Most popular retirement spending simulation applications for financial advisors feature scores of inputs that may take as long as half an hour or more to enter. While entering complex planning information such as the timing of different cash flows from pensions and social security and the impact income and capital gains tax on sustainability can provide helpful, valuable information for clients, Nest Egg Guru, serves a different purpose.
With just eight basic inputs, Nest Egg Guru quickly and easily gives your clients a sense of whether they are on track for a secure retirement and how changing variables such as their spending need, their portfolio allocation, their annual inflation adjustment may enable them to improve their standard of living in retirement and make their money last longer. In this sense, Nest Egg Guru is not intended to replace your sophisticated back-end planning software but rather to complement it.
That said, Nest Egg Guru’s retirement spending app does have one unique and vital input that is absent in nearly all mainstream professional planning software. That is the ability to test four different withdrawal strategies – spend stocks first, spend proportionately from each asset class with annual allocation rebalancing, spend bonds/cash first, and a simple decision rule that does not sell stocks to meet income distribution needs following down years for equities.
This input educates clients on the importance of choosing a spending strategy, and it is absent in most other planning apps.
#4: No capital markets assumptions helps avoid garbage-in, garbage-out.
Nearly all popular Monte Carlo simulation software in the independent advisor space makes assumptions about each asset class’s expected mean return and standard deviation. However, as most advisors know, neither mean return and standard deviation are constant over time. As a result, estimation errors of just percent or two here and there lead to dramatic results when illustrating over time horizons as long as 25 or 30 years.
For instance, most Monte Carlo apps today make assumptions about the mean return and standard deviation on bonds and cash that are significantly higher than what consumers can hope to earn in today’s historic low-interest rate world. While over-optimism may be a lovely quality in a person, it can be disastrous when trying to stress test a retirement spending portfolio.
In contrast, Nest Egg Guru employs a simulation methodology called bootstrapping that obviates the need for the users to make capital markets assumptions. Instead, our software randomly samples monthly historical return data from 1970 to the present for large-cap, mid/small-cap, and international equities. Then, to avoid over-optimism for cash and bonds, we ask users to input the return they can reasonably expect to get on those asset classes today.
Also, in contrast to MC software, we do not suggest that the output has any predictive ability, and we do not express the simulation results in terms of probabilities. Instead, our sample set contains enough severe down-market data. Thus, our output gives the users a sense of what might happen to their portfolios over time if the investment environment is unaccommodating.
What other benefits does a subscription to Nest Egg Guru confer to Financial Advisors?
As you know, the independent financial advisor space is crowded and competitive. Your website is your primarily calling card, and standing out in a digital world is more challenging than ever. Nest Egg Guru’s white-labeled apps offer a great way to stand out from your peers, and embedding the apps in your website can help your SEO and improve your search rankings. Nest Egg Guru also has unique lead generation functionality that may be turned on or off depending upon your preference.
Lastly, while most financial planning apps today cost $1,000 or more per year, Nest Egg Guru is committed to making affordable client-facing software. All of our apps may be purchased individually for $135-150 per year, or you may buy our three planning apps plus Password Guru for just $300 per year.
Sign up for a 30-day free trial or one-on-one demo at www.NestEggGuru.com