MLC subsidiary Plum Financial Services has built an asset allocation tool to help educate members about the investor characteristics associated with specific asset classes.

Members logging onto the ‘asset allocator’ are provided with explanations of investment basics, such as the four major asset classes – cash, fixed interest, property and shares – and the relation between risk and return. They then can access a list of investment ‘paths’ that cater for beginners as well as more sophisticated investors. Five basic profiles, from conservative to aggressive, suit the beginner investor; multi-manager options are open to more educated investors; and individual managers’ offerings suit experienced investors. A ‘wizard’ bar tracks each user’s progress through the steps. Users then enter percentage values into chosen investment options or individual funds, and the tool classifies the investor, ranging from conservative to aggressive, based on the values entered. “You can keep modelling until you’re satisfied with the allocations…We want people to understand what they are doing with their investments and to help them make sure the allocation suits them as an investor,” Plum manager, product and strategy, Peter Talacko, said yesterday. The tool is not a ‘switch tool’ that can be used by members to implement real changes to their balances – Plum members must access a separate online mechanism built for that purpose. An investor profile questionnaire accompanies the tool. Talacko said that quantitative surveys of Plum’s member base and general client feedback prompted development of the asset allocator.

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