Most investors and advisors build their strategies around assumptions of smooth, compounding growth. Spreadsheets are filled with elegant CAGR curves, projecting a serene march upward. But real-world wealth accumulation is anything but smooth. It’s lumpy. It’s erratic. And it’s defined by inflection points — not by averages. Yet, our tools, models, and communications often obscure this truth, reinforcing a myth of stability that doesn’t align with lived financial experiences.
These discontinuities are not accidents — they are the essence of real wealth creation. A liquidity event, a market dislocation exploited correctly, or a sudden business windfall: these punctuate the smooth lines with leaps. But many planning tools can’t capture this. And worse, they may discourage bold action by implying risk is only tolerable in linear doses. This isn't just a modeling flaw — it’s a mindset trap.
Understanding and planning for discontinuities requires abandoning the comforting lie of the curve. It demands new visual metaphors, portfolio frameworks, and communication strategies that embrace jumps, shocks, and bursts — not just glides. If smooth growth is an illusion, then we need a new vocabulary for planning.
Traditional investment modeling thrives on linearity. We simulate growth based on annual returns, smooth volatility, and tidy up drawdowns. In presentations, these models look polished. But ask any high-net-worth investor about their journey, and you’ll hear about major jumps — a company acquisition, an IPO, a sudden liquidity event. These moments don’t follow linear logic. They’re step-functions in disguise.
Consider two investors: one growing 6% annually for 25 years; another stagnant for long stretches, then enjoying three outsized gains. Most models only tell the first story. While traditional models assume wealth grows gradually, real breakthroughs often result in significantly higher ending values. These discontinuities may appear volatile, but they concentrate opportunity, flexibility, and resilience into fewer, decisive moments — changing the trajectory entirely.
Discontinuous outcomes aren’t just financial — they’re emotional. They shape how investors see risk, trust planning tools, and anchor expectations. When a sudden success reshapes a client’s entire net worth, it changes their behavior far more than compounding ever could. They don’t want projections. They want stories that reflect their jumps.
Wealth managers shouldn't ignore this. Clients don’t relate to charts that show a 6% slope. They remember 2008. They remember 2021. Planning tools must accommodate the leap — show what happens when a single year changes everything. We must replace “expected return” with scenario-based storytelling.
Wealth is not built on curves. It’s built on moments — moments of decision, opportunity, or luck. Planning systems that fail to capture this do their clients a disservice. The goal isn’t to predict jumps. It’s to plan around their possibility, visualize their impact, and prepare the portfolio’s resilience across scenarios.
This demands a new planning mindset — one that celebrates discontinuity instead of smoothing it. Not because chaos is desirable, but because it’s real. And because understanding it makes us better stewards of risk, timing, and narrative clarity.
Pivolt helps translate those inflection points into communicable narratives. Whether through dynamic dashboards, simulation tools, or AI-powered storyboards, it gives advisors what clients actually seek: not a forecast, but a reflection of how wealth truly happens. One jump at a time.
