Tracking your financial trajectory across accounts feels akin to piecing together a puzzle without the full picture on the box. How do you effectively monitor asset allocation? Are you adequately accounting for risk? What about hidden fees dragging on performance?
Empower‘s Investment Checkup Tool seamlessly consolidates your financial data and runs diagnostics identifying potential problems early. So you can course correct towards financial goals confidently.
This comprehensive guide explores Empower’s analytical capabilities for both casual investors and high net worth clients. Read on to determine if the platform could empower your prosperity journey too!
How The Investment Checkup Unlocks Insights
Empower syncs transactions from integrated bank, investment, loan, and credit accounts to unlock holistic analysis including:
Asset Allocation Testing – Is your mix properly calibrated to minimize risk and maximize returns? Empower analyzes holdings across stocks, bonds, real estate ect to identify gaps between current and target allocations personalized to your risk appetite and goals.
Return Forecasting – Historical portfolio performance informs projections for conservative, moderate, and aggressive return scenarios. Stress test strategies across potential futures.
Risk Assessments – Quantify concentration risk, volatility risk, severe loss risk and retirement shortfall risk then rebalance to mitigate.
Fee Detection – Eliminate hidden costs deducted across accounts dragging on actual net returns. Achieve full fee transparency and savings.
Financial Goal Tracking – Benchmark investment account asset growth against long-term savings and debt payoff targets ensuring aligned trajectories.
Now let‘s explore how exactly the Investment Checkup Tool drives this multifaceted analysis.
Empower‘s algorithms crunch data from integrated accounts to run portfolio diagnostics while advisors provide guidance interpreting results and prescribing improvements.
Securely Link All Your Accounts
The first step is securely connecting your various financial accounts through encrypted bank-level data transfers including:
- Checking & Savings Accounts
- Investment Portfolios
- 401(k)s, IRAs, Pensions
- Mortgages, Loans, Lines of Credit
- Credit Cards
- Brokerage Accounts
- Crytpo Wallets
- Other Liabilities
This provides a single dashboard visibility rather than logging into 11 disjointed account portals.
Analyze Asset Allocation Matches
At its foundation, the Investment Checkup analyzes your asset allocation – how capital is distributed across diverse holdings like:
- US & International Stocks
- Investment Grade & High Yield Bonds
- Real Estate, Commodities, Metals
- Institutional Alternatives
- Cash & Cash Equivalents
Studies by finance researchers like Roger Gibson and John Lintner indicate over 90% of portfolio returns stem from asset allocation vs individual security selection.
Yet only 55% investors have a formal investment policy statement guiding allocation according to data from Charles Schwab’s Modern Wealth Investor study. And a 2021 Personal Capital survey found 25% of retirement savers have no idea how their assets are invested!
The Investment Checkup Tool compares your actual asset mix to an optimal target personalized for your risk appetite, goals timeframe, income needs and more. Exact rebalancing recommendations help close allocation gaps to derive maximum returns at comfortable risk levels.
Project Returns Over Time Horizons
In addition to risk alignment, expected returns determine if investments can reach required growth rates for financing major upcoming costs like:
- Higher Education
- House Down Payments
- Medical Procedures
- Retirement Livelihood
The Investment Checkup projects compound portfolio returns over 3, 5 7 and 10+ year horizons under various market scenarios:
- Conservative Case
- Moderate / Base Case
- Aggressive / Best Case
You can assess if current savings and investments trajectories can fund future financial obligations or if course correction is necessary to close gaps.
Mitigate Various Risk Factors
While returns represent potential upside, managed risk helps minimize downside loss threats that could upend a family’s livelihood.
The Investment Checkup identifies and quantifies portfolio risk across dimensions like:
- Concentration Risk – Excess exposure to individual holdings
- Volatility Risk – Annual return variation
- Drawdown Risk – Severity of peak-to-trough declines
- Shortfall Risk – Chance retirement savings come up short
This illuminates blindspots and informs tactical rebalancing to curb risk through better diversification.
Eliminate Hidden Fees
Even tiny recurring portfolio fees compound into tremendous lost value over years that most investors fail to realize.
Vanguard founder Jack Bogle discovered the average actively managed mutual fund at the time underperformed markets by the exact amount of fees deducted. This sparked the passive index revolution tied to his firm’s later success.
Yet opaque or unnecessary layers of fees persist across brokerages, advisors, 401(k)s and more. Empower‘s Fee Analyzer identifies this costly drag so you can optimize.
Benchmark Savings Goals
Finally the Investment Checkup Tool connects with Empower‘s broader financial planning capabilities for complete alignment.
As investment accounts accrue assets, this progress benchmarks against long term goals like:
- Eliminating credit card and student loan debts
- Saving emergency funds covering 6 months of expenses
- Funding college savings accounts to fully finance expected costs
- Staying on-track for retirement based on income needs
Consolidating investment performance with overall savings shortfalls in one dashboard makes reaching critical financial targets easier.
Now let‘s explore additional capabilities provided on top of the core Investment Checkup algorithm.
To supplement automated analytics, Empower offers standalone tools for investigating specific portfolio questions:
Portfolio Analyzer
Empower‘s Portfolio Analyzer generates custom recommendations to reduce investment risk levels including:
- Weighting adjustments to diversify concentration
- Reallocating to less correlated assets
- Hedging with protective options trades
See exactly how much reconfiguring allocation reduces annual volatility and severe loss risks.
Fee Analyzer
The Fee Analyzer provides unmatched transparency including costs paid for:
- Account maintenance
- Trades and transactions
- Expense ratios of funds
- Advisor management fees
- 401(k) plan administration
Minimize unnecessary expenses deducted across your accounts.
Retirement Planner
Will current investing and savings properly fund your retirement years?
Empower‘s Retirement Planner clarifies how factors like:
- Adjusting savings rates
- Capping spending habits
- Delaying claiming social security
- Relocating to tax-friendly states
Impacts the feasibility of fully covering fixed costs decades into the future. Tweak variables to create your optimal path forward.
Tax Coordination
For eligible accounts, Empower facilitates tax loss harvesting – strategically selling losers to offset recognized gains and reduce your annual tax liability.
Take advantage of market downturns by converting paper losses into realized savings.
Access human advisors
For clients with over $100k in assets, schedule video consultations with Empower‘s team of dedicated financial advisors for personalized guidance on implementing recommendations.
Now let‘s examine the pros and cons of Empower‘s paid Wealth Management services.
Once your linked accounts exceed $100k, Empower offers escalating tiers of Wealth Management support:
| Tier | Account Balance | Perks |
|---|---|---|
| Investment Service | $100k – $200k | Retirement & financial planning |
| Wealth Management | $200k – $1M | Dedicated advisor team |
| Private Client | Over $1M | Custom services, institutional access |
But are these paid offerings worth the annual asset-based fees starting at 0.89%?
Customized Investment Strategy
Your personal advisor team constructs a holistic portfolio across all your accounts optimized to your needs for:
- Asset classes
- Individual securities
- Account types
- Ongoing contribution levels
- Tax efficiencies
- Risk & return balance
Portfolios dynamically adjust over time as goals and environments evolve. Stress testing ensures resilience to market turbulence.
Access to institutional managers and alternative investments unlock growth potentials beyond typical retail options. Take advantage of techniques like venture capital funding, structured products, derivatives, and more tailored to your risk appetite.
Tax and Fee Savings
Beyond raw returns, your after-tax net take home matters most. Empower advisors actively implement tactics to reduce taxes like:
- Tax loss harvesting
- Placing assets favorably
- Donating low basis positions
- Roth IRA conversions
The team also eliminates unnecessary layers of fees deducted from managed portfolios at institutions like Fidelity, Schwab and Vanguard.
Prevent excessive expenses from deducting hard-earned gains.
Wealth Management Limitations
However, Empower Wealth does have some limitations including:
- 0.89%+ asset-based fee may exceed competitors
- Cannot directly open investment accounts
- Cash account APY trails rivals
Unless you expect to utilize complex capabilities like derivatives or alternatives, sub $1M investors may prefer more affordable Robo platforms.
Now let‘s examine if Empower fits your distinct financial needs.
With automated analytics plus human advisor access Empower delivers immense value but works best for two archetypes:
High Net Worth Investors
The $100k minimum asset threshold for paid services means Empower remains tailored to wealthy investors who can benefit most from personalization and institutional offerings less affluent individuals cannot access.
For those with over $1M in investments, Empower provides white glove services surrounding complex estate planning, legacy management, niche alternatives, and more warranting highly customized guidance.
Self-Service Investors Seeking Organization
Even investors not yet meeting account minimums for dedicated advisors derive immense free utility from Empower‘s consolidated investment tracking and goal benchmarking capabilities.
It eliminates the fragmented experience of logging into 11 different account portals to manually import data into spreadsheets. Automation provides speed and convenience while reducing human error in tracking.
So while tailored to the affluent, Empower assists nearly any investor increase organization and insight.
Now let‘s get you set up with the platform!
Ready to leverage Empower‘s suite of financial tools? Here is the quick process for linking accounts and accessing your investment checkup:
Creating Your Account
First visit Empower‘s website and click "Get Started" to register your account credentials.
Provide basic details like your name, email, password, age, residence, marital status, dependents, career, and current financial snapshot.
Linking Financial Accounts
Next securely connect banks, investment portfolios, retirement plans, credit cards, mortgages, and other liabilities.
This allows Empower to automatically sync transactions, balances, holdings and other account activity to fuel analysis.
Scheduling Consultation
If total linked assets exceed $100K, an Empower advisor reaches out to schedule a portfolio assessment consultation.
This video call reviews your risk levels, asset allocation, performance, fees paid, and personalized next steps to further optimize your financial trajectory.
If you don‘t qualify for paid wealth management or prefer self-directed investing, retain access to Empower‘s free financial planning tools.
Ultimately, Empower facilitates total financial visibility and intelligent portfolio diagnostics revealing potential problems early when still easily correctible.
The Investment Checkup Tool specifically empowers personalized asset allocation, return forecasting, risk management, fee minimization, and goal tracking.
While paid services demand high investable asset minimums, the free financial dashboards assist nearly any investor better organize their financial lives.
So leverage Empower’s technology and guidance to confidently stay on-track towards your dreams!
