The industry’s view

The asset management industry in general views investment planning as a financial planning issue. Few asset managers actually model the ability of assets to meet needs over time or structure your portfolio in a way that it is dedicated to your personal financial needs over time.

Indeed, few asset managers will actually take into consideration, or have the systems and processes that can take into consideration all an investors assets.  It is, for them, much simpler to manage a separate chunk of money.

While financial planners have long provided projections on future wealth accumulation (how much do you need to save, how much capital will you have to retire on) they do not in general possess the expertise to structure portfolios to meet needs nor do they possess the expertise needed to model the risks to the ability of assets to meet needs over time.

Interestingly, there is little educational focus within the industry on this problem. Most education is either related to products and sales or to technical aspects of stock selection and portfolio theory. If the risks of capital depletion were in fact risks that affected the financial institutions, they would be managed more effectively.