Since 2022 we have entered unchartered waters in financial markets and wealth management. Decade high interest rates have made borrowing and debt repayment trying, a current bear market has depressed asset classes in most portfolios, a generational high inflation rate has made everyday living from daily meals and keeping a house lit and warm difficult, and a tepid economy has many Canadians seeing clouds on the horizon. Those without a solid personal financial plan put the financial health of themselves and their families in question.
There are numerous financial planners that can help to get your financial house in order, but the current financial planning process can be overwhelming for the average person. Lengthy written documents and complex data tables are common in the process that is off-putting for clients. For wealth managers, it’s not sufficient to have industry leading knowledge in the stock market, cash flow management or estate planning, they need to be able to efficiently convey accurate and sound advice to clients so a practical plan could be put in place to help them navigate through choppy waters. Camber Private Wealth Management recognized this issue and developed a unique solution – a collaborative visualization and modelling approach that provides clients with easy-to-understand insights into their financial well-being.
Traditional financial planning generally starts with a client interview and various assumptions, such as tax, cash flow, assets, growth rates, etc, are inputted into a financial planning software where a standard, generic report is outputted. The financial advisor would then walk the client through the report with a review of the plan at a regular interval.
When we were in kindergarten, the teachers didn’t teach us about the world using pages of texts, but shapes, colors, interactions and pictures. As adults, we have seemingly forgotten this simple learning principle and tend to overcomplicate learning. CEO Rob Townsend and his team at Camber knew they had a competitive edge in terms of client service and financial strategy when they recognized the challenge the industry has in terms of educating clients and how visualization is effective in solving this issue. They realized that traditional financial plans were not always effective at communicating these strategies to clients. A standard 75-125 page plan can take hours to read, and even then, the level of client comprehension can be limited. With Camber’s approach of presenting information through interactive online data visualization tools, hours can turn into minutes for the complete review, along with increased comprehension for the client. Through a handful of strategically constructed visualizations, a client can view in detail year-by-year or month-by-month how their nest egg will be managed from now until retirement with various scenarios and details into their cash flow, asset growth, taxes, as well as insurance and estate planning. This approach has proven to be highly successful, as it allows clients to easily navigate and understand the assumptions and data models, leading to efficient, concise and focused conversations.
Camber's dashboards standout from the industry due to their innovative design and functionality. For years, the Camber team has been conducting on-going research of how best to present information in a way that maximizes understanding. Each dashboard is tailored to the individual client and includes data on their current financial situation as well as projections for things like income, spending, taxes, and investments. Upon entering the dashboard, clients are presented with an analog section where they can quickly navigate to specific pages or view the reports in a logical order. Some of the most impactful elements include a portfolio flow chart where individual portfolios are broken out into account types (non-registered, TFSA, RRSP, etc) and then branches into asset allocations. This allows clients to visually see the benefits of RRSP and TFSA type strategies, while diving deeper to find information about tax inefficiencies in both the selection and actual account location of their investments.
Another popular visual is a country allocation chart. This has been fundamental in the company demonstrating to clients the concept of Equity Home Bias, where investors tend to over-allocate their portfolios towards names of their home country. Clients are familiar with these companies through the news, radio, and social circles, and then miss out on opportunities abroad such as profitable American companies in similar economic sectors trading at cheaper prices, or small companies growing rapidly in India profiting from high internal GDP growth not found in the developed world.
Camber is open in saying that the first iteration of the dashboard was nothing more than a proof-of-concept, but nonetheless realized that it’s a genesis of an innovative financial planning approach. Excited by the promise of the idea, Rob and the team constructed a series of dashboards in PowerBI. Understanding that they required support to take the project to the next level, the company approached Ryan Cacanindin and Chris Selig at Calgary-based Selica Analytics, where the pair recognized the advantage of technology while working in business, accounting and finance capacities, and then turbocharged their skills with data analytics studies and work experience.
Taking Camber's vision, Selica was able to begin accessing the power of advanced visualizations, optimized data transformations and PowerBI’s native DAX language. The first hurdle that Selica had to contend with was an older financial planning software Camber used to generate financial projection data. While the software excelled at advanced calculations, it is limited in terms of integrations. Data APIs and direct connection are absent and the only way to access the data is through the front-end GUI. This realization quickly changed the scope for Selica and what they had envisioned for how the dashboards would be built. The first issue was accessing the important client information in an automated fashion, but they also had a responsibility to build Camber a solution they could maintain going forward. Years of experience have proven that working closely with clients to build manageable solutions is critical and that over-engineering quickly with poor change management oftentimes leads to failed projects. While a modern cloud-based solution ideal, the staged execution strategy is practical for a successful outcome.
With this in mind, Selica got to work on a process that would feed SharePoint-based Excel input sheets directly into a PowerBI report where the dashboards would be designed. The choice of PowerBI was also intentional for usability and maintainability for Camber. In many situations, Selica used Excel to pre-process data, and then move it into the PowerBI reports for less reliance on complicated DAX formulas. This was especially helpful as they worked with the Camber to fine-tune measures in the project’s later stages. Selica implemented an entire new data process consisting of excel templates, calculation checks, folder structures and documentations to reduce preparation time and errors. This new process is essential in building the final dashboard product.
During this time, Camber also took advantage of a unique opportunity to collaborate with a pair of University of Calgary Master of Data Science Students and look to apply machine learning to predict client expenditures better. Projected spending is often an area where clients struggle to properly gauge. Utilizing publicly available Survey of Household Spending from Statistics Canada, an unsupervised clustering model was trained to take Camber client information as inputs and return a prediction for their forecasted spending habits. This would later become a popular component of the Camber dashboards and is often used in the initial stages of client consultations.
Within a year of their first conversations with Selica, Camber had a holistic custom data-driven financial planning tool consisting of interactive data visualization dashboards with components that use machine learning predictions. They quickly began offering the new product to clients, allowing them to access their personalized financial planning dashboards via PowerBI Service, and the responses were very positive.
The company has plans to enhance their financial planning tools. The project's success has led to the realization that a structured database with continuous data integration will be required in due time. From this, they have discussed the possibility of developing a client portal web application and diverting their reliance away from PowerBI for the dashboards.
There is an abundance of financial planners and financial planning software in the market, but Camber Private Wealth Management stands out in understanding the delicate task of being entrusted with clients’ financial well-being, and the importance of continuously improving client service delivery by digitally transforming its financial planning practice with custom data solutions.