4 Risk Analytics Features That Help Advisors Grow

With rising interest rates, soaring inflation, global unrest, and other concerns, clients are understandably worried about the impact this perfect storm of market and economic challenges might have on their current investments and their future financial goals.

And in spite of how ultimately effective it may be in the long term, advice to just “stay invested” won’t alleviate the rising concerns being continuously stoked by media outlets and political campaigns.

Today’s advisor needs a more robust toolkit to inspire the kind of impactful client conversations that keep investors comfortable and confident in their investment strategies in spite of what’s going on in the world externally.

And doing so could have a bigger effect than strengthening current client relationships — it could also help advisors attract and retain more business. 

Enter financial risk analytics. A few years ago, Orion acquired HiddenLevers, a next-gen financial risk analytics and stress testing platform that we brought fully under the Orion umbrella as Orion Risk Intelligence.

And while financial risk analytics may not seem immediately apparent as a growth strategy, it can be a significant differentiator for both client experience and prospect engagement, enabling advisors to turn our current uncertain environment into a catalyst for business development.

1. Streamlining Model Management for Growth

When you can reduce your manual workload, you free up time to engage with clients. Risk Intelligence allows you to streamline and automate the model management process using three key features:

• The model optimizer tool allows you to adjust the risk score of the model, and the system will automatically shift allocations within the portfolio to reach the desired score.
• The interactive editor gives you the power to edit a model freehand. Swap out securities or add new ones, making as many adjustments as you’d like before finalizing.
• The blend models and funds tool makes it easy to swap out securities for SMAs, fixed income, or other individual securities.

All of these features are designed to streamline and simplify the model management process. When you reduce the amount of time you have to invest in back-office tasks, you have more time to invest in proactive client updates.

2. Surfacing Real World Scenarios

While most financial risk analytics tools look backward to inform their stress-testing scenarios, Orion Risk Intelligence is constantly updated using current data to build scenarios based on real-world events.

So when clients or prospects have questions about the impact of the election, or the housing market, cryptocurrency and a looming recession on their investments, you can point to data-backed answers about what they can expect from working with you. 

Stress testing using what’s actually happening in the world reinforces the story you tell about your investments, giving your narrative additional credibility and helping to put clients at ease.

3. Addressing Both Upside and Downside

‘Risk’ inherently comes with negative connotations, but from a fiduciary standpoint, keeping the best interests of your clients and prospects as the North Star of your work means staying positive — not just looking at the downside and negative scenarios, but also illustrating for them potential positive outcomes in the future.

Orion Risk Intelligence allows you to visualize and highlight nuances in risk all the way down to individual securities within accounts, across a wide range of outcomes, empowering more meaningful upside and downside conversations. 

4. Showcase Day-to-Day Adjustments

Because Orion Risk Intelligence adjusts day-by-day as markets are changing, advisors can also use the platform to show their clients how much risk remains. 

For example, in 2020, as the market was coming down rapidly in March, causing panic among investors and even compelling advisors to consider selling, the model was able to showcase how much risk remained. Being able to illustrate that the incremental downside isn’t as bad as it appears can help reassure clients and reduce the knee-jerk urge to panic sell.

Ultimately, the best prospecting work you can do is to serve your current clients well, especially during times of turmoil and uncertainty. Providing personalized attention and concrete answers to the questions that are most top-of-mind for them builds trust and enables their peace of mind, which in turn can lead to significant referral traffic for your business.