Caravel Concepts

CMPAS

Better for Advisors
& Their Clients

CMPAS is a goal-based financial planning tool that provides the financial advisor a partner for financial planning and investment management. With CMPAS, each client receives a customized investment strategy tied to his or her specific life goals.

CMPAS allows clients to prioritize their goals as NEEDS, WANTS and DREAMS, and designs a planning solution that provides additional protection for the client’s most important goals.

Once client goals are defined and prioritized, CMPAS builds customized portfolio strategies crafted to achieve each client’s individual goals while respecting their tolerance for risk. CMPAS software and modular portfolio concepts allow advisors to assemble these customized solutions from a small number of building block portfolios. Progress monitoring helps the advisor and client monitor each plan with intuitive and easy to understand reports and prompts the advisor when strategy adjustments are required.

CMPAS FEATURES: Customization

Customized Investment Strategies with Scalable Technology

Dynamic Real Estate Debt, Expense, & Cashflow Modeling

Real estate is often a client's most important asset. As such, CMPAS models a person's home and rental property price appreciation using the same sophisticated Monte Carlo tools used for stocks and bonds. Debt, rent, and expense cash flows are all calculated automatically based on client input and simulation of potential rent and expense inflation.

CMPAS “mass customization” technology scales individualized advice across the largest advisory practices.

Historically, the practical barrier to providing individualized advice to every client was the overwhelming administrative and risk management challenges. CMPAS overcomes these barriers with cutting edge technology and the mass customization concepts pioneered by Michael Dell. Clients need customized solutions to fund their unique life goals. CMPAS empowers advisors to provide that customization while simultaneously reducing their administrative burden and enhancing their risk management process.

Clients expect and deserve a truly customized investment strategy optimized to their specific life goals.

Investors are coping with volatile markets and rapidly approaching life goals. Planning software that simply cycles through a canned set of asset allocation models no longer meets their financial planning needs. With CMPAS, each client receives a unique portfolio strategy optimized for their specific life goals and risk tolerance. No two CMPAS investment strategies are exactly the same because no two clients are exactly the same. We believe that customized advice increases client odds of financial success, and reduces the stress that volatile markets inevitably bring.

An Indian man and woman speaking with their financial advisor and smiling.

CMPAS FEATURES: Automation

Software That Does The Heavy Lifting For You

Investment and tax strategy optimization makes portfolio solutions easier and better.

CMPAS automatically assigns goals to different accounts based upon potential tax benefits. Each account’s recommended investment strategy is then optimized for the specific goals it has been assigned. CMPAS automation frees advisors from the drudgery of manually calculating how each account should be invested, and automatically ensures that the combined account strategies align with the client’s risk tolerance and overall investment plan.

Automatic de-risking keeps your portfolio strategies on target.

Your client’s goals are protected by an automatic de-risking process that alerts advisors when goals are approaching and portfolio risk needs to come down. With CMPAS, the advisor no longer has to calculate how the investment strategy needs to evolve; the software automatically updates its recommended strategy as time passes and goals get closer to being funded. Our system tells advisors which accounts need to be de-risked and the exact dollar amount that needs to be moved to lower risk asset classes.

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CMPAS FEATURES: efficiency

Build with Existing Portfolios & Optimize Your Tax Strategies

We build on your success.

CMPAS assembles customized portfolio solutions from your existing portfolio strategies, minimizing turnover and keeping your existing investment strategy and process in place. Advisors enter their asset allocation strategies by risk level (conservative, moderate, growth, etc.) and account type (taxable, tax-deferred, high net worth, etc.). The CMPAS mass customization process assembles these models like building blocks into customized solutions optimized for the specific life goals of each client.

Capital gains optimization ensures the benefits of trading outweigh the tax consequences.

Our software empowers advisors to optimize capital gains vs. returns with sophisticated multi-strategy scenario analysis that includes capital gains expense reporting. This reporting allows advisors to compare their existing strategy to the ideal allocation strategy and the tax deferred strategy, assessing which goals will pass and fail under each strategy and choosing the right balance between tax optimization and return maximization.

Goals automatically funded from optimal accounts.

Education goals are funded by the 529, retirement is funded by an IRA, 401K or Roth account, medical goals are funded by an HSA, etc. Our system will drain the appropriate account first before tapping into less tax-advantaged accounts in order to save your client money. The investment strategy for each account is optimized for the time frame of the goals it is funding (low risk for nearby goals, higher risk for goals that are further out).

Young asian man portfolio manager looking at a computer tablet.

CMPAS Features: PROTECTION

Comprehensive Risk Management Across Every Aspect of the Planning Process

You determine how bulletproof your NEEDS, WANTS, and DREAMS should be.

CMPAS allows advisors and their clients to set a probability for each goal priority that best fits them. Defaults are set to NEEDS at 90% success, WANTS at 80% and DREAMS as 70%, but clients can adjust these probabilities to reflect their personal tradeoff between sleep at night security and additional savings and sacrifice. A 90% probability of success means that if a client’s NEEDS occurred during the worst possible 10% of historical market returns, their goals would still be able to be achieved. In other words, in a Great Depression scenario your client NEEDS would still be met.

Individual goals are independently funded.

With CMPAS, each goal is treated as its own financial plan with its own independent source of funding. The software also identifies the specific assets necessary to fund each goal. With specific assets devoted to each goal, investors can be assured that spending money on early goals (like a sports car) will not impact the security of later, higher priority goals (retirement). That means that if a client buys their DREAM sports car and the next day the market tanks, their NEED retirement income will still be secure.

Innovative risk profiling offering clients an intuitive framework for making choices.

CMPAS shows precisely which goals pass, fail, or must be reduced at different portfolio risk levels. By quantifying the trade-off between your client’s goals and their potential portfolio downside risk and presenting the information in an intuitive manner that clients can easily understand, CMPAS helps clients find their ideal balance between risk and reward. It’s the choice between taking more risk in order to seek that dream Ferrari or taking less risk and being happy with a new Ford.

Dynamic Inflation Modeling

The last few years have been a potent reminder to investors that inflation will not remain static over time. CMPAS randomly simulates inflation along with all the other asset classes, incorporating the historical negative correlation between inflation and long term real returns. This negative correlation means that, as inflation rises, the dollar amount of client goals increases just as the real returns available to fund those goals decline (for most asset classes). We think realistic long term financial plans need to task into account this potential risk.

In-depth Stress Test and Crisis Analysis

CMPAS generates stress reports that detail specific plan results under different market environments. Clients can see the extent of projected protection for higher priority goals under extreme market scenarios, and the degree to which goals can be partially funded even under adverse market environments. On the bright side, clients can also see the potential upside to plan results should market returns be closer to long term average.

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CMPAS Features: Control

Advanced Controls Over Portfolio Management

Choose from a diverse array of asset classes informed by S&P Dow Jones.

Advisors should not be limited by their planning software to only the most popular asset classes, or be trapped in a style box confined to growth and value. CMPAS asset allocation and planning tools support virtually every asset class represented by an S&P Dow Jones market index. CMPAS empowers advisors to break out of the style box with innovative asset classes like Low Volatility, Quality, Dividend, Momentum, and more. We also provide custom modeling services for asset classes outside the S&P universe.

You control key assumptions.

Caravel believes that the key capital market assumptions (CMAs) that determine plan results should be controlled by the advisory firm, not the software provider. With CMPAS, advisory firms can choose between industry standard Static (“random walk”) assumptions and Price-Driven CMAs that vary expected returns based on valuation levels. Caravel also supports a third CMA choice with the option to encode your firm’s proprietary CMA process.

Comprehensive Asset Allocation & Risk Return Guidance

CMPAS provides a comprehensive set of risk/reward & benchmark analytics for asset allocation strategies, as well as an optional set of optimization tools to help qualified portfolio manager advisors improve the risk/reward profile of their strategies.

Complete Simulation Transparency

We support complete transparency into the simulation results, and can provide any reporting requested or required for due diligence or potential regulatory requirements.

Optimization

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Blue and orange graph shows the ups and downs of the market.

Planning Software Built
By Financial Professionals