Measuring the client’s financial well-being

In today’s financial advisory world, the key word is personalization. Every client is unique, with specific needs and goals that require tailor-made solutions. But how can an advisor ensure that each financial decision truly contributes to the client’s well-being?

To solve this dilemma, Wealthype has created the Financial Wellness Index (FWI), an innovative tool designed to help financial advisors in the planning process.

What is the Financial Wellness Index?

The FWI shows, as a percentage, how well the current portfolio is covering a client’s financial needs. The lower the percentage, the bigger the gap to fill. This tool allows the advisor to quickly identify areas that need attention, improving how the portfolio aligns with the client’s goals.

A Practical Example

Let’s imagine a (fictional) client with an FWI score of 31 out of 100. This score, calculated by our algorithm based on socio-demographic, financial, and asset data, as well as answers to the MiFID questionnaire, shows that the current portfolio doesn’t fully meet the client’s needs and highlights areas that need work to reach a more suitable asset allocation.

The advisor—who truly understands the client and their needs—can step in and adjust the intensity of different goals. For example, they might reduce the importance of decumulation and increase focus on protection and health. Automatically, in this case, the FWI score will adjust as well.

A Holistic and Client-Centered Approach

What sets the Financial Wellness Index apart is its holistic approach. It doesn’t just stick to the classic risk-return analysis; instead, it puts the client’s long-term financial well-being at the center. The FWI is designed as a support tool for the advisor, who remains the key figure in understanding and interpreting the client’s needs.

The Benefits of the Financial Wellness Index

• Total Personalization: Every recommendation is built around the client’s actual needs.
• Dynamic Analysis: The advisor can modify the priority of needs over time, adapting the portfolio to the client’s life changes.
• Focus on Needs: The indicator concentrates on the client’s goals, moving beyond traditional financial evaluation methods.

Thanks to the Financial Wellness Index, advisors can guide their clients on a personalized financial growth journey, creating a truly meaningful advisory experience.

Are you interested to try this product? Write to us at info@wealthype.it to discover how to integrate artificial intelligence into your financial advisory process.