Using data collected by Manulife since its inception and that from Statistics Canada, Manulife Investments has created a retirement planning platform based on client goals. The platform, Manulife Goals-Based Investing (GBI), will be available to Manulife Securities Advisors advisors as of Oct. 1.
"This program is a key part of our digital transformation strategy…The tool is based on two elements: data analysis and our expertise in quantitative management," explains Charles-Antoine Laplante, Head of Strategy and Business Development, Wealth and Asset Management Canada at Manulife Canada.
Evaluating spending habits and income
Aimed at people nearing retirement, GBI uses age, income, health factors and postal code to assess the client's spending habits and the income they will need in retirement.
For example, the tool shows the average spending on recreation, drugs and health care, for people with a profile similar to that of the client, for the same geographic location. It also indicates how much people with a similar profile have saved, on average, at the same life stage as the client.
After entering the information, the platform produces a timeline where the advisor and the client can see the projected expenses and revenues. If the retirement goal is not on track to being achieved, the tool offers alternatives: either to increase the retirement age, increase contributions or a mix of both.
Projected income includes payments from the Canada Pension Plan, the Quebec Pension Plan and Old Age Security, and are net of fees.
Investment strategy based on liabilities
The platform employs a Dynamic Liability-Driven Investment (LDI) strategy, an institutional investment strategy that Manulife is making available to retail investors. Dynamic LDI aims to match the client’s income needs with a corresponding payment of income, says the company.
The tool places client savings in internal mutual funds managed by Manulife Asset Management and Manulife Investments, as well as third-party Exchange Traded Funds (ETFs).
"We are able to design a fairly elaborate retirement plan in just a few clicks with quite impressive results compared to more traditional retirement planning techniques," says Laplante.