Thomson Financial has launched a new component to its advisory wealth management platform, incorporating Monte Carlo probability analysis and life events planning capabilities.
Thomson Advisor Financial Planning is powered by Financeware's calculation engine and methodology, following Thomson's second round funding investment in the company in October 2001.
Using Thomson Advisor, financial advisors may gather detailed information on client goals - including retirement, education or other cash flow events - and rank them in order of priority. Taking into account a client's current holdings, projected contributions and tax implications, Thomson Advisor Financial Planning analyses and determines the probability of success for multiple goals in succession of priority, as well as for the overall plan.
These probabilites are measured through:
* historical audit - simulation is performed using historical returns in the order in which they occurred;
* wealth simulator - simulation is performed using randomised historical returns; and
* Monte Carlo - simulation is performed using randomly generated correlated returns based on defined asset classes and is currently the industry standard in probability analysis.