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May 31, 2016

Snap! A Solution For The Canadian Investor

by David Ensor

David EnsorIn my previous article (It ought to be a Snap! CMS May 2016), I made the case that there ought to by now to be a product available for Canadians that was specifically tailored to their need to be able to plan comprehensively for their financial futures, and, at the same time, intuitive, flexible and fast, setting out a range of factors that they need assistance with.

As the astute readers of CMS will have gathered, this was not, in fact, a “cry in the dark”, but rather a “teaser” because, by happenstance and good fortune, I have finally found a product that I believe truly fits the bill.

I was recently introduced to Pawel Brzeminski, the founder and CEO of Snap Projections (snapprojections.com), who has created what I believe is a remarkably effective, scaleable tool specifically designed for helping Canadians to make better and more completely informed financial decisions over the longer term. I should emphasize that I have no financial interest in Pawel’s business.

There is much debate about the extent to which individuals should be responsible for their own financial planning (the “DIY” approach), or whether, for most people, the process is such a complex one that it requires specialized advice; and, if the latter, what form that advice should take, who should provide it, and how it should be paid for. Ultimately the answer to these questions must be whatever is appropriate and affordable for the individual.

In the case of Snap Projections, the firm enters into partnerships with a whole range of financial advisors, including individual planners, mid-sized advisory firms, portfolio managers, two large Canadian banks and a number of so-called “robo-advisors”. A key aim is to make the tools and capabilities which Snap Projections provides available to as broad a range of individuals as possible, but with the benefit of the involvement of and advice from a trusted financial advisor.

The thinking behind this is that it is the partnership between an unbiased expert and the individual, in which the advisor educates and informs (but does not persuade or cajole) his or her client, helping him/her to arrive at the most optimal decision for that individual, is most effective. Furthermore, the decision-making tools should be provided in an easy-to-use and flexible form, providing reports that are clear, easily understood and that provide guidance on logical steps a client can take to achieve their realistic goals. And all this should done in more or less “real time”, enabling more efficient use of the time available for strategic thinking and the development of scenarios that are relevant to the client and their needs.

So, What Exactly Is

Snap Projections?

For online subscribers to CMS, here is an embedded link to an introductory video  presentation (snapprojections.com/cms/). Otherwise readers should go to the website listed above to view it.

It is important to understand that the tools have been developed by Canadians for Canadians (and so, not some “afterthought” from a non-Canadian financial combine), and take into account, for example, an individual’s specific province or territory of residence. The software and algorithms are constantly updated to take account of changes in federal and other relevant jurisdictions’ tax and financial legislation, so that the results provide a realistic, not hypothetical, view of a client’s current and future position, based upon then current legislation and rules.

The client and advisor are presented with a series of forms and drop-down tables—firstly to input basic background information such as age, place of residence, current salary (and/or other sources), assets and liabilities [see Figure 1]; and, secondly, to start making assumptions that are important and relevant to the client, such as expected retirement age, lifespan (note that Snap Projections can run scenarios beyond age 100), expectations for future returns on investments, inflation rates, desired or optimal asset mix, “down-sizing”, and so on [see Figures 2 and 3].

Snap Projections

Once the necessary inputs have been made, the algorithm is run (in real time, as it is hosted on Snap Projections’ servers) and an initial output table is produced [see Figures 4 and 5], providing both a time series that can be reviewed [Figure 4] and a summary table [Figure 5].

Snap Projections

I would call this the Base Case, which forms the starting point, if necessary, for amending assumptions and making adjustments to generate further cases, in the process increasing both the client’s and the advisor’s understanding of the key factors that have the most impact on helping the client meet their goals.

Snap Projections

Snap Projections

Once the final scenarios have been run, the advisor is able to produce an easily understood report [Figure 6] for the client to review and follow up with further questions, or to use as the basis for taking the steps necessary to start implementing their plans and working towards their goals.

Snap Projections

This article serves as an overview of Snap Projections’ capabilities. The key points to understand are:

  • It is specifically designed for Canadians;
  • It is holistic and intended to encompass as wide a range of circumstances and scenarios as practicable;
  • Its use is intuitive;
  • Results are provided in real time and can easily be adjusted and updated;
  • It is unbiased (i.e., it is not designed to promote any particular outcome or investment mix); and,
  • It can be used to plan far into the future (beyond age 100).

Obviously, providing an overview is all very well, but you may be asking how Snap Projections works in practice. In my next article, I shall, therefore, provide a worked example of the tool in action. In the meantime, I encourage CMS readers to view the website and video presentation.

David Ensor, Risk Management Consultant

david.ensor@btinternet.com