The Product Profiler® maps product types to the client’s needs and uses a scoring methodology to help determine which mix of investment vehicles or products is best suited for an individual client’s needs. These suggestions are combined with ReasonText™ that explain why a product type fits a client’s needs. The Product Profiler has been configured to meet the needs of SEC Reg BI and PTE 2020-02.
Basic Structure of the Solution
The user has the option to either have the system help them select best interest product categories or validate a product category selected by the user. In cases where the user opts to validate a product category, the Product Profiler will analyze the proposed category as a best interest fit and will display the findings. Additionally, as is required for Reg BI, the Profiler will provide Reasonably Available Alternatives at the product category level.
The questionnaire collects all the necessary data to make precise data recommendations. Key Data points include::
• Basic Client Data Collection
• Retirement Income Needs
• Non-Retirement Goal Information
• Retirement Contributions
• Preference for Guarantees vs Liquidity
• Proximity to Income Need
• Current Assets
• Risk Tolerance
Evaluation of Options
Based on the client’s information input into the questionnaire, product types with their best interest status are displayed to the user. The models are determined based on the following:
• Risk tolerance
• Size of portfolio
• Proximity to retirement
• Retirement Income projection
• Growth versus Guarantees Score
Show your work with ReasonText™
The compliance grid is displayed above the ReasonText™. Each product category is analyzed against a set of firm configurable rules. The green checkmarks listed below confirm that this sale meets the firm’s best interest requirements for each data point.
Plan Rollover Analysis
The analysis is complete based on the following factors:
• Investments in the plan
• Expenses and Services
– Fees can be input from statement
– 401k plan lookup using Form 5500 data
– Average fees/expenses can be estimated
• Client Financial Circumstances
• Risk Tolerance
• Needs of the Participant
• Account Specific Withdrawal Advantages and Disadvantages
• The Existence of Company Stock or Active Plan Loans
• Discussion of credit protection tradeoffs on rollover assets
Product Profiler Enhancements for Reg BI
In a validation case, the tool evaluates all the other product types and provides them for comparison. This assists the advisor in analyzing reasonable alternatives.
Validate Product Option
This option allows the user to validate whether a product is in the best interest of the client. This bypasses the selection process and makes it easier for the advisor to quickly validate that their selected solution will be in compliance with their firm’s best interest rules.
Reasonably Available Alternatives
In a validation case, the tool evaluates other available product types and then provides them for comparison. This assists the advisor in analyzing Reasonably Available Alternatives.
401k Review Enhancements
401k rollover review is enhanced to not look at justification of “better investment options”. Also moved up to the front of the input to allow for the concept of “moving from here (401k) to here” (managed account or other) and separate the output to highlight.
The output is enhanced with a grid displaying each issue evaluated and a status.
All Needs (Not Just Retirement)
The Product Profiler will support all investment needs (accumulation, education etc.)
Enhanced Data Capture
For new rules the application captures Source of Funds and Change Reasons with applicable flags that validate these options to products.