Frequently Asked Questions
HerE'S WHAT firms ARE ASKING ...
1. What is ERO?
ERO, or Essential Returns Objective, is a Financial Advisory software platform based on Nobel Prize winning statistical analytics and extensive research which is made up of two tools, The Optimizer and The Calculator.
It is designed to work alongside a Financial Advisor to shift the focus of the service away from risk-based investing, to goal-based investing, which meets the goals of a client better, faster and more effectively.
This builds confidence in your financial service and provides fiduciary liability protection in a cost-effective and efficient way.
2. Why is ERO a more profitable way to manage investments?
ERO has the potential to be a more profitable approach for several reasons.
The first its a client-centric mechanism which helps develop financial advice and strategy based on a client’s needs and life goals. Because it is more closely aligned with the client’s goals, the financial advice is more meaningful and relevant to them which may increase asset accumulation and Assets Under Management (AUM) potential.
Additionally, ERO can make the financial advisory service more efficient as it is based on award-winning and extensively tested algorithms designed to help Financial Advisors find the optimal portfolio which matches their client’s goals.
3. How will ERO benefit my existing portfolio construction process?
ERO is a platform built to improve performance which accelerates asset accumulation, eliminates poor performing investments and offers more accurate investment strategies.
The ERO Calculator then determines the required rate of return to achieve your client’s goals, and the required Investment Portfolio Model.
Then ERO Optimizer analyzes thousands of mutual funds and investment products to provide you with 5 Investment Portfolio Models in minutes.
Together, this will allow you to construct the right financial advice in a few minutes, based on Nobel Prize Winning concepts and proven analytics. It also allows you to track progress on an ongoing basis and adapt the investment strategy in the long-term.
4. Why is goal-based investing better?
Any professional service that focuses on the goals of the client is always going to produce a better customer experience because it’s specific to their unique circumstances.
By creating a financial plan based on a client’s goals, the whole process becomes more relevant and profitable. This not only improves their investment understanding, but it also earns their trust because their Financial Advisor sets the objectives around achieving success based on results that they care about (for example, retiring at 65 with a fully paid mortgage), rather than just how much risk they’re willing to accept to make more money.
Goal-based investing is considered better because it focuses on the end goal event, not just the means to an end.
ERO takes a goal-based approach to investing by starting with a client’s life goals, and then creating a financial strategy to achieve those goals.
5. What is post-modern portfolio theory (PMPT)?
Post-Modern Portfolio Theory (PMPT) is a goal-based approach to investing, which assembles a portfolio of assets according to a client’s objectives. This more quantitative method is built on a deeper, consultative relationship between a client and the Financial Advisor, where the conversation focuses on what the client determines as essential objectives they want to meet.
As a result, the client sees the financial advice as directed towards achieving goals that really matter.
This is as opposed to Modern Portfolio Theory (MPT) which is a risk-based approach to investing, using outdated analytics to assemble a portfolio of assets to maximize the expected return for an acceptable amount of risk. This is sometimes also referred to as mean-variance analysis.
ERO is a platform that implements a Post-Modern Portfolio Theory because it focuses on client results based on their life goals, rather than just their tolerance to risk.
6. What's an example of a PMPT conversation versus an MPT conversation?
A Financial Advisor with a Post-Modern Portfolio Theory approach focuses on creating adaptable strategies to match a client’s specific future goals and tracks progress.
For example: “Based on my calculations, to pay off your mortgage and retire comfortably at age 65, you currently require a moderately aggressive investment strategy which aims to meet or exceed a return of 10%.”
However, a Financial Advisor with a Modern Portfolio Theory approach would focus on creating strategies based on the extent of risk a client is willing to take.
For example: “Based on my calculations using your tolerance for risk, you must invest in this particular portfolio for 5 years to make another $50,000."
7. How does ERO work?
ERO powerfully enhances a Financial Advisor’s service by providing a client-centric financial strategy based on their personal objectives and goals.
ERO transforms your financial services to offer more meaningful value to a client than just risk versus reward.
To learn more visit - How ERO works
8. How can I learn more and see a demo?
Easy! Click Book A Demo
You can ask as many questions as you want, and there is no obligation or commitment.
We want you to see how easy it is to take your revenue and investment goals to the next level.
9. If this is so great, are other advisors using it successfully?
Yes, we have Financial Advisors are already working with ERO and witnessing the difference it offers their firm.
As for the platform itself, ERO is not a traditional asset management program. It provides Post-Modern Portfolio Theory (PMPT) advancements for constructing better-built portfolios, active manager evaluation, optimal blending of active and passive management investment vehicles and portfolio navigation methodologies.
Therefore, ERO is advanced, innovative, and internationally adaptable to any market.