PFaroe enables investment managers to deliver impressive and engaging pitches based on analysis of a plan’s actual liabilities and investment portfolio, via a user-friendly and web- based interface. This can even be done in a live client environment – in front of the investment board or CIO.
Investment managers can discuss asset allocation and consider the impact of different investment strategies, employing a number of techniques from what-if scenario testing through to powerful stochastic modelling. PFaroe goes further than other technology options, allowing investment managers to model their proprietary pooled and segregated funds for inclusion in the analytics.
With PFaroe’s flexible data input options, investment managers can work with granular plan data or high-level summary information.
No investment allocation decision should be made in isolation. For defined benefit pension plans, that means understanding the impact of investment strategy on plan liabilities and funded status. PFaroe allows investment managers to assess the impact of a change in the investment strategy not only on investment returns and risk, but also on cash contribution requirements, accounting expenses, and other metrics.
PFaroe is underpinned by a powerful liability model used by the industry’s most sophisticated actuarial firms – but is also simple enough that a non-actuary can easily upload complex plans. Asset analytics can be generated using benchmark assets, an investment manager’s own promoted funds and/or from assets modelled at a security level. Alternatives are included for a holistic view of the portfolio. From these liability and asset inputs, PFaroe automatically produces a comprehensive suite of liability, asset and risk analytics, allowing investment managers to interrogate and test solutions from multiple perspectives.
In formulating investment hypotheses, implementation of the advisor’s capital markets assumptions enhance the overall value proposition. Results are consistent across all institutional types and sizes.
PFaroe’s regular, easy-to-access analytics allow investment managers and their clients to monitor and report on a plan’s risk and funding position efficiently and effectively. It also allows investment managers to regularly test the effectiveness of risk management strategies, and work with clients in an interactive way to evolve solutions over time. User-friendly analysis dramatically increases the understanding and engagement of clients, and enriches the relationship.
PFaroe’s reporting capabilities are powerful and comprehensive, providing a potential platform for front-to-back reporting needs. PFaroe can generate client-ready reports, either for pitching to new business or for monthly/quarterly LDI reporting requirements, on-demand at the click-of-a-button.
Given PFaroe’s established market presence, its network of users can be used as a means to “get the word out” about investment manager’s established pooled and segregated asset solutions. For instance, a client with a suite of LDI solutions can choose to make those solutions available to the investment consultants using PFaroe, who in turn can illustrate the effectiveness of those solutions to the end-user pension plan.
With PFaroe, a joint proposition between the plan actuaries, investment consultants, and investment managers is a compelling possibility.
PFaroe’s easy-to-access yet sophisticated analytics allow investment managers to improve how they communicate complex ideas to their clients. Reporting can be tailored and built into PFaroe, allowing for operational efficiency and promotion of the investment manager’s brand. Investment managers are no longer burdened by report preparation and number-crunching, and can instead focus on providing value-added analysis to clients.
Monitoring and reporting on portfolio risk and contribution implications can be performed more frequently and seamlessly.
These efficiencies make it economically viable for investment managers to provide more tailored solutions to a wider range of clients, including smaller plans. Disparate systems and services can be rationalized through implementation of PFaroe, saving time and money, while manual intervention is eliminated, improving security and minimizing the risk of errors.
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