Planit:General Assumptions

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In this Video you will Learn...
What do I enter in the General Assumptions fields?
• Jurisdiction
• Inflation assumption
• Discount rates
• Return reduction
• Allocation method
• What should you use? Defaults are fine

Keep on Track! Continue training on...
Investment Management Modular Planning
Life Planning Integrated Planning
Getting Started Planning Assumptions Screen

Other Related Topics
Process Flows Introduction to the Planning Assumptions Screen (Canada) Introduction to the Planning Assumptions Screen (Malaysia)
Jurisdiction Inflation Assumption Return Reduction


The material in this video may differ somewhat from what you see on your site due to difference in version, jurisdiction, corporate content or access level. Regardless of these differences most of the core functions are consistent across all sites, so you'll be able to benefit by and large from what you learn in this video.


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  • Enter in the Planning Jurisdiction and Planning Province this will default to what you have set on your own advisor profile.
  • Inflation - The impact of inflation is felt in all aspects of planning for the future. Set an inflation rate that reflects a reasonable level for long term planning. We default this field to 3% based on the historical long-term rate of inflation in Canada over the past 61 years and based on current economic conditions.

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  • Discount Adjustment - The Discount Adjustment is used to help figure out what Discount Rate will be used within Planit. We have set it to a default however you can change this and whatever is inputted in as the adjustment factor, it is then added to the inflation rate, which equals the Discount Rate.
  • Discount Rate - The Discount Rate is used to calculate all present values throughout Planit. The Discount Rate is set by identifying an adjustment that is added to inflation. Our default it to set the adjustment factor to 2%. Thus the discount rate will be Inflation + 2%. You have the option of changing the adjustment factor to ultimately use a higher or lower discount rate.
  • Return Reduction - Sometimes you may feel the returns may be too high, if this is the case then you can reduce the returns. By using this drop down menu beside the field “Return Reduction” you can reduce the returns by many different percentages or you can select Custom and enter in your own reduction. Please keep in mind that the PlanPlus Planit is populated with historical indices data for all asset classes and our goal is to retain data for a 40-year period.
  • Risk Free Rate - The Risk Free Rate is the theoretical rate of return of an investment with zero risk, including default risk. The risk free rate represents the interest that an investor would expect from an absolutely risk free investment over a given period of time. The default is the rate of return for Cash for any jurisdiction but can be changed if desired. This Risk Free Rate is used only in one place in PlanPlus Planit. This is in the Stock Option Report where an analysis is done of a client's stock options.
  • Prime Rate - This is the prime lending rate rate used by banks. The default that appears is unique for each country. This rate is used in the Debt Consolidation calculator. When you have variable rate loans, they are often "Prime +" loans meaning the rate is tied to the prime lending rate PLUS a specified premium, such as 1%. Thus in the Debt Consolidation calculator your variable rate loans can be tied to the prime rate plus the negotiated premium the client is paying on their loan, such as Prime + 1%.
  • Allocation Method - A powerful feature is that you can now choose the asset allocation method to be used for classifying your client’s holdings on a client by client basis. In past versions we used the "Balanced" asset allocation method. What this meant was that we identified the asset allocation of any products based on their Fund Type. For example a Canadian Equity fund would be classified as 100% Canadian Equity. If that fund had 2% Cash or 8% US Equities, those small weightings would not be recognized in the allocation for that product. Previously only funds flagged as Balanced identified the granular asset allocation breakdown, since that’s typically why you use such funds . . . for their diversification across a variety of asset classes.

Allocation Method field where you can decide for yourself which method you want to use for each client. You can also set a default on your user profile screen so any new clients will default to your method of choice. For any existing client’s in the database, the setting will be Summary since this is the method used prior. You’ll only be changed to the Detailed method if you make a decision to do so.

To help you understand the impact of what you might notice on your clients, we have create a couple of scenarios for you to review please Click Here to read more on this impact.