Franklin Templeton Combines Award-Winning Research with Machine Learning in New Goals Optimization Engine
September 16 2020 - 9:00AM
Business Wire
The new technology solution enables goals-based
wealth management at scale
Franklin Templeton today announced the introduction of its
proprietary Goals Optimization Engine, or GOETM. The global
offering provides investors with personalized investment paths for
their unique goals, and allows financial professionals a scalable
way to offer a differentiated investment solution and deepen client
relationships. The Engine is built based on 2018 Markowitz Award
winning proprietary research that defines investment success by
whether or not the investor’s goals are achieved, recommending
investment decisions that will help maximize that chance of
success. Banks, advisers, financial professionals and defined
contribution plans can leverage the technology to help provide
better outcomes to their clients while gaining business
efficiencies.
“We are seeing an increased demand for goals-based planning and
personalized investment solutions globally, and the application of
machine learning is enabling what was previously unimaginable,”
said Jed Plafker, EVP, Global Alliances and New Business
Strategies. “As society generally moves towards digital platforms
and technology-based services, GOE is the technology that will
enable advisers and financial services firms to deliver
personalized, higher value services at greater scale.”
GOE, a patent pending process, combines a proprietary algorithm
based on award-winning research, detailed capital market
expectations, and a set of parameters for each goal provided by the
investor. GOE is designed to take these parameters and optimize the
asset allocation to maximize the probability of successfully
achieving the goal by applying machine learning. This optimization
process occurs regularly through the time horizon of the investment
and re-allocates assets to increase or decrease risk in the
portfolio as needed. GOE will de-risk as the goal date approaches
versus reaching for a higher return, with higher risk. GOE can also
facilitate decisions across goals with different priorities.
“Franklin Templeton’s digital distribution initiatives are
focused on innovation, speed and agility to deliver value added
services and personalized investment solutions to our financial
professionals, advisers and investors,” said Harshendu Bindal,
director of Digital Strategy and Wealth Management for Franklin
Templeton. “GOE uses machine learning to scale up to the size of
any practice and manage any number of portfolios for an investor.
This technology provides the adviser or financial professional the
mechanism to deliver personalized wealth management across their
entire practice.”
GOE’s open-architecture offering will be delivered through
AdvisorEngine, Franklin Templeton’s recently acquired platform.
Franklin Templeton is also building relationships with third-party
technology companies and financial institutions to enable access
around the world. One such relationship is with NextCapital, with
whom GOE will be brought to market as part of a discretionary
managed advice solution for the defined contribution industry. GOE
is one in a series of investments Franklin Templeton has made along
the wealth tech ladder.
Franklin Templeton has expanded its offerings beyond traditional
investment products to now include planning and advice, digital
tools, and advisor and retirement platforms. The expanded offerings
weave active investing strategies and advice into turnkey digital
platforms, enabling financial planners to efficiently run their
businesses with custom optimized portfolios in an open-architecture
environment.
A paper detailing the academic research behind GOE, “A New
Approach to Goals-Based Wealth Management,” by Sanjiv R. Das,
Daniel Ostrov, Anand Radhakrishnan and Deep Srivastav received the
2018 Harry M. Markowitz Award from the Journal of Investment
Management and New Frontier Advisors, LLC. This is an annual award
honoring Dr. Harry M. Markowitz, a Nobel laureate in economics, for
his legacy and to support future research and innovation in
practical asset management. Candidates are taken from among papers
published in the Journal of Investment Management each year.
About Franklin Templeton
Franklin Resources, Inc. [NYSE:BEN], is a global investment
management organization with subsidiaries operating as Franklin
Templeton and serving clients in over 165 countries. Franklin
Templeton’s mission is to help clients achieve better outcomes
through investment management expertise, wealth management and
technology solutions. Through its specialist investment managers,
the company brings extensive capabilities in equity, fixed income,
alternatives and custom multi-asset solutions. With offices in over
30 countries and 1,300 investment professionals, the
California-based company has more than 70 years of investment
experience and approximately $1.4 trillion in assets under
management as of August 31, 2020. For more information, please
visit franklintempleton.com and follow us on LinkedIn, Twitter and
Facebook.
Copyright © 2020. Franklin Templeton. All rights reserved.
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Franklin Templeton Corporate Communications: Rebecca Radosevich,
(212) 632-3207, rebecca.radosevich@franklintempleton.com Prosek
Partners: Cary Sherman, (857) 302-3712, cruterman@prosek.com
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