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The typical investment consultant has access to large amounts of asset research, expertise, and modelling capabilities for performing investment studies. In the context of DB pension plan investing, however, certain actuarial or liability expertise may not always be available in-house. PFaroe helps to bridge that gap.
PFaroe possesses a rigorously designed – and tested – actuarial toolkit that investment consultants can use to lever their expertise in designing solutions for their DB pension clients. In fact, many household names in the actuarial community use PFaroe for all of their own modelling needs and have helped contribute to making it the best-in-class platform it is today. From inflation-linked pension plans, to lump-sum-convertible plans, to cash balance and pension equity plans, PFaroe’s liability model is equipped to address the dynamic investing needs of any pension plan, regardless of complexity.
PFaroe goes even further, however, by integrating regulatory liability metrics – from funding requirements to pension cost calculations – in order to allow for truly liability-aware investing. For instance, switching out a particular fixed income manager will impact not only the risk/return structure of the plan’s investment portfolio, but also future cash requirements. An investment consultant that anticipates these cross-balance-sheet impacts will be able to engage much more dynamically with their clients and prospects.
Strategic investment allocation studies have been the remit of investment consultants for decades. PFaroe adds a new flavour to this exercise in that potential investment options: are web-based, distributable, and interactive for use in live client meetings; interact dynamically with plan liabilities and critical liability metrics; and able to drive nimble decision-making through the use of comprehensive and visually-appealing risk metrics.
Furthermore, illustrating manager selection has never been more versatile. PFaroe allows the investment consultant to approximate custom manager benchmarks in PFaroe, compare and contrast the impact of a variety of selections, and then display the results in the context of its cross-balance sheet impact on the plan. Stochastic analysis can be leveraged to illustrate how any manager selection will play out over multiple years and under many different future economic scenarios.
PFaroe’s value proposition allows for an integrated conversation to occur, on one platform, combining the investment consultant, the actuarial consultant, and the investment manager.
PFaroe empowers investment consultants to engage with clients more interactively than ever before, providing on-demand desktop analysis of pension funding and risk positions. Comprehensive ‘What if?’ functionality allows discussions and scenario testing in real time. PFaroe makes complicated concepts and analytics intuitive, leading to more informed clients with a desire for increased, and deeper, dialogue with their consultants.
Clients can also be provided with direct access to PFaroe’s functionality, making reporting more efficient. This also drives a better appreciation of pension risk by plan sponsors, resulting in them feeling more comfortable in making funding and investment decisions more quickly and efficiently.
PFaroe’s modular functionality allows consultants to tailor analytics to the needs of the client.
PFaroe provides a holistic platform encompassing all actuarial valuation and analytical requirements. Its detailed liability valuation system has been designed to be intuitive, user-friendly and transparent. An innovative approach to modelling ensures valuation outputs can be completed more efficiently whilst seamlessly integrating with other PFaroe functionality.
Alternatively, consultants can set up a suite of analytics for a client using summarised data within just an hour. This is a game-changer both in terms of providing cost-effective solutions and in delivering more focused and superior presentations for business development.
RiskFirst’s client-driven philosophy means that analytics continue to evolve to meet the changing needs of plans and consultants.