There has never been a greater choice of do-it-yourself portfolio management software today. With the rise of many new online start-ups offering both wealth tracking software and financial education targeted at do-it-yourself (DIY) and self-directed investors, this choice can be overwhelming.
So what should budding DIY investors be looking for when evaluating these tools? At the very least, they should allow investors to track, analyse and manage a portfolio of investments. However, the standout providers will include advanced features, such as the ability to test their investment portfolio in different market conditions and showing key risk and return metrics for each scenario.
Canstar speaks with BigFuture Founder and CEO Donald Hellyer about the BigFuture software.
Q: With such a large choice of wealth tracking software in the market, what is BigFuture’s competitive advantage?
A: We are free. We expect 80% of Australian’s to never pay us a cent.
The benefits of the Wealth Tracker product include:
- Our database is built up from security level, so we can provide complete asset and country allocation which is essential if you are to perform sophisticated simulations.
- We can track wealth by net worth, total investments, asset class and security
- A user can allocate assets into super and non-super assets (great if you are running a SMSF)
- Automatic update of balances
- Multi-Currency (handling foreign denominated assets) and Multi-functional currency (able to see your total wealth in a currency other than Australian dollars)
- We are experts at building and integrating databases…ours is very powerful. If a financial institution can produce a file in hieroglyphics, we can use it.
The benefits of our Education modules include:
- Years of experience meaning we can distil complex issues down to easy to understand concepts.
- But we can handle expert level of conversations (We have three founders with 6 finance qualifications)
- We have our own AFSL
- We are great at animations (built in-house)
We are really good modellers and know what can be modelled correctly and what is torturing data beyond its ability to yield information.
The other big competitive advantage is that we break down superannuation funds, managed funds, mfunds, ETFs and LICs into their proper asset class. Not many wealth trackers can do that. Its only by getting down into asset and country allocations can any retirement simulation have any credibility.
Q: How should BigFuture be used? Is it intended to replace a financial advisor?
A: BigFuture is designed for you. You most likely don’t have a financial advisor (only 20% of Australians do) and probably weren’t taught how to manage your investments at school or at university. The first question I pose to you is what website do you go to see all your total wealth? They answer is none because it doesn’t exist, until BigFuture. So BigFuture is designed to help both the beginner and the expert understand their total wealth position, become more financially literate and plan their financial future. We are not Robo-advisors but more digital mentors. Our B2B business is pitched at being the digital connector between financial institutions and their members/clients.
Version 2 of BigFuture was released in March, and has three modules: wealth tracker, education and financial tools.
Wealth Tracker allows you to have a detail look at what you own. You can automatically link your bank accounts, superannuation funds, managed funds and shares to BigFuture with balances being continually updated. Where there is no automatic links, we have built a large database of securities/funds where we continually update prices, asset allocation and country allocation. Finally there are free format inputs for securities not captured or unlisted such as your home, business weird investments. It all multi-currency.
Education is critical and we have built up a large library. We sell our work to financial institutions and this can be seen at www.bigfuture-education.com
Retirement Planner is a very sophisticated but easy to use model. It is a stochastic / Monte-Carlo version, building in tax rates and Centrelink rules for age pension. It allows a user to design the lifestyle they would like to live in retirement and then see the probability that this can be financially sustained both in good and bad markets.
Q: How often is the Wealth Tracker updated?
A: We update data from banks, shares and bonds over night and as the User would like. Prices update periodically during the day for shares.
Superannuation funds and managed funds update overnight.
Property is more irregular as you would expect, although mortgages are fed straight through form bank updates.
Q: How many different market conditions can be simulated through the retirement planner?
A: We have a real competitive advantage in that our retirement planner tool is a stochastic simulator. In other words we will do 1000s of simulations which capture all types of market conditions. We can then work out the probability of how long retirement income will last. Our simulator can capture changing spending patterns and changing market conditions. This is one of our big competitive advantages.
BigFuture is just one of many fintech solutions currently on offer; you can discover other fintech solutions with WealthBricks. Please note that CANSTAR is an information provider and in giving you product information CANSTAR is not making any suggestion or recommendation about a particular product. Readers should also note, in relation to products dealing with ETFs, that ETFs are considered by ASIC to be complex financial products. Some types of ETF are more complex and risky than others. For more information on ETFs and risks associated with them, see ASIC’s Moneysmart website at https://www.moneysmart.gov.au/investing/complex-investments/exchange-traded-products