Benjamin Felix

So it's not a huge deal.

Did you look at the impact sorted by age or like length of the projection?

Interesting, you're correct.

That's an important point.

And this is one of the cool things, as John mentioned about the model that they built is that we are still using the same expected returns.

We've just changed the way that we're generating the distribution around those expectations.

So as you said, we're not shifting the distribution one way or another, we're just changing the shape of the distribution to be more historically accurate, realistic.

It's worth mentioning, you touched on this briefly because people might be thinking, why did you guys expend all of this effort if it doesn't actually change things that much?

One of the big reasons, and we haven't really gotten there yet, but we're moving in that direction.

This was a first step.

One of the big reasons that we care about those higher moments of the distribution and the shape of the distribution is for other asset classes.

So for us to model venture capital, for example, using a mean and a standard deviation and a correlation is just not sufficient to capture the expected effect of that asset class at the portfolio level.

Likewise for other sort of alternative asset classes.

So that's something we've struggled for a long time because even though they're not things that we recommend, we do have high net worth clients who have allocations to those for whatever reason.

Maybe they were recommended by a previous advisor and maybe they were done as a passion project or whatever, or maybe they just wanted exposure to that asset class.

And modeling that in a financial plan has been a thorn in our sides for a long time.

Using this type of simulation method is going to be a huge improvement when we get to those asset classes.

I thought it was worth mentioning because we're not seeing huge changes to small changes.

We're not seeing huge changes to the simulation results based on this better methodology, but for other asset classes, it'll matter a lot more than for standard stock and bond portfolios.

Yeah, it's interesting.