Asset Allocation Worksheet

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Asset Allocation Worksheet

The Asset Allocation Worksheet is the area of the application where you identify the client's risk tolerance and match it with a recommended allocation. You will not actually pick your recommendation from this screen, that will happen in the Dynamic Results area, but from this screen you will have access to the two main components of the recommendation process:

  • (1) Risk Tolerance Questionnaireand
  • (2) Portfolios.
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Risk Tolerance Questionnaire If you subscribe to Finametrica this section will not be visible

The first step in the Asset Allocation worksheet is to determine the client’s risk tolerance by taking the questionnaire. Click on the "Questionnaire" button to go through the risk tolerance interview. Upon completion of the questionnaire, the program shows the resulting client's risk tolerance at the top of the allocation worksheet screen. At any time you can review the answers entered previously by clicking on the same button. Once you're done, click the "Next" button to proceed to the Asset Allocation results screen and select the appropriate recommended portfolio for the given risk tolerance.

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NOTEThe Risk Tolerance Questionnaire can also be filled out by your client using the Investor Portal.

Custom vs. Model Portfolios

There are two types of portfolio allocations you may create in Finance Logix: Custom Portfolios and Model Portfolios. Structurally these two types are identical, the only difference is their visibility throughout the system. Model Portfolios are created from the Account Settings section, whereas Custom Portfolios are created on a scenario level, and can only be viewed from within that scenario.

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A Model Portfolio will be accessible as a recommendation option for all your clients. Generally these are templates that you have created, or that have been created for you by your firm, and use most often with your clients. They represent various allocations for a specific level of risk and respective projected rate of return. Model Portfolios may be based on generic Morningstar categories or include specific investments.

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Leveraging the Morningstar data, we provide you with historical Rate of Return and Standard Deviation values for the portfolio as you create it. You can then use those values to set the future return expectations of the model, or use them as a guideline while choosing the values you prefer.

NOTE: Please be sure to review the model portfolios and custom portfolios regularly, as we do not maintain them for you. As market conditions shift, so should your recommendations.

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