AimVest's Philosophy

Picture yourself at a car dealership. You’re the eco-conscious type, so you want to go electric, obviously. Would you expect salespeople to ask you whether you prefer a lead-acid, a zebra, or a lithium-ion battery?

Nope. That would be inappropriate. You might guess that lithium-ion is good. But there is no way you will know the exact implications off the top of your head: how many minutes to top off my battery? How far can I go on a single charge? How much more reliable the car? One thing only is for certain: charging speed, efficiency, and reliability are the factors you care about.

In the investment space, asset managers and financial advisers will often confront clients with blurry options. Think of the “how risk averse are you?” or “how much debt vs. equity do you want?” type of questions. Likewise, it is inappropriate. Implications are too technical to be fully grasped by the client. As a remedy, consumer education is often suggested. But it is counterproductive in our opinion. Clients do not have sufficient time for, nor particular interest in financial markets. Besides, the level of financial expertise required to understand the construction of portfolios in the goal-based investing scope is advanced. You would no more require clients to make those kinds of decisions than an automaker would dump a pile of car parts and a manual in your front yard with a note that says “Here’s what’s needed to build the car. Deal with it.”

Rather than trying to dazzle clients with esoteric financial jargon, AimVest opens a smart dialogue: minimum learning requirements from the saver, meaningful only interactions. Enough of the “on a scale from 1 (conservative) to 5 (aggressive), your rate is 2, so your portfolio will consist of 20% stocks and 80% bonds”. The focus is shifted away from such abstract metrics as return and volatility which give no idea of implication on goal achievement and thus on future purchasing power and standard of living. Instead, the investor is asked about a minimum expected amount – the floor – and a maximum – the ceiling – they will require from their portfolio at liquidation to finance their goal (e.g., a certain wealth range upon retirement, another range to afford their child’s college tuition which vary based on the school, a minimum and a maximum amount in mind to buy a car whose price will fluctuate depending on packages, etc.). They need only worry about meaningful and practical inputs on which they can make an informed and intelligent judgment: how much money do they expect from their retirement account (1) – floor and ceiling –, at which liquidation date (2), how frequently do they wish to contribute money (3) and how much (4). AimVest’s sole feedback to the investor is the probability of reaching the goal. As common sense would have it, there are four things the customer can do to improve their outlook should they be dissatisfied with the resulting set of probabilities: increase or decrease their floor and ceiling (1), postpone or advance the maturity date of the mandate (2), rethink their contribution schedule (3), and increase or decrease their contributions (4). The format of AimVest’s product is designed such that making adjustments on those four inputs suffice to produce all of the mathematically possible outputs. In other words, goals are fully characterized, without the client having to struggle over technical and obscure financial concepts. Our algorithms do the rest and make sure the money is optimally invested (optimal: the right assets, in the right quantity, over the right period of time).

If you should take only one thing away from that tedious development, take that: AimVest bundles a complex quant strategy in a simple package – an app. Check it out.