investment planning overview - emoney advisor

1 | Plans: Investment Planning Overview

Investment Planning Overview

These training materials are intended solely for subscribers licensed with eMoney Advisor and are not to be used with clients or other members of the general public.

This user guide will demonstrate the capabilities of the Investment Planning Tool. The Investment Planning Tool allows the advisor to examine the client’s existing asset allocation and recommend a new portfolio for the client at the security level. The tool provides for efficient frontier analysis and for a buy/sell list, with tax impact analysis. The advisor can also use the tool to specify an investment policy for the new portfolio, as well as establish asset allocation alerts for maintaining the tolerances set for the portfolio.

1. Click on Clients and choose a client.

2. From the Client Overview, click Plans.

Please Note: The Investment Planning Tool reports are available only within

Investment Planning and cannot be combined with other system reports.

The Investment Planning Tool reports make specific product recommendations and

therefore cannot be combined with any other type of planning or analysis. The

reports are generic and can thus be used with either standard clients or organizational

clients.




3. Click Investment Planning.

4. Click Add and select a template.

There are 5 different Investment Planning templates.

Investment Proposal: a comprehensive initial proposal that selects existing investment accounts and proposes a new set of securities.

Investment Policy: a proposal that specifies investment accounts, an asset allocation, and management boundaries for those accounts.

Investment Proposal & Policy: a combination of the Investment Proposal and Investment

Policy templates.

Execution Follow Up: shows the effects on a portfolio after execution.

Investment Rebalancing Report: a review document that compares an existing portfolio with an existing Investment Policy to show whether the portfolio is within its boundaries or not. If it is not, the review includes rebalancing transactions to bring the account back within tolerances.




5. Name the investment plan and click Go.

6. If facts are not entered yet, click the Go to Facts button.

7. When done entering facts, click the shortcut link above the Advanced Facts to get back to Investment Planning.




8. Select the Assets to Analyze and click Load.

Please Note: Pages that contain input fields are preceded by a pencil in the icon.

Data entered directly into these pages is not saved to the client’s base facts.




9. The Current Portfolio Details page presents a table containing the holdings in the client’s current portfolio, grouped by the primary asset class for the security or fund. Accounts with a value but without actual holdings are identified as miscellaneous in the security column of the table and are allocated amongst asset classes according to the asset’s defined asset mix.

10. Click Target Portfolio. Choose the recommended portfolio for the client based on risk tolerance and other factors. For standard clients where a recommended portfolio exists, the report presents a risk bar, with the client appearing at a point corresponding with the risk level of the recommended portfolio.




11. Click the Asset Allocation Comparison page to view a comparison of the client’s current portfolio asset allocation with that of the target model portfolio. Next to the pie charts is a positive / negative stacked bar chart that displays the disparity % between the portfolios.

12. The Proposed Actions page displays a dynamic table comparing the client’s current portfolio with the recommended portfolio and itemizes the actions needed to align the current portfolio with the target. The portfolios are grouped by asset class and listed side by side within the table.




13. The Proposed Actions page dynamically allows the actions required to align the portfolio with

the recommendation via global buttons that apply actions for the entire page and local buttons that apply actions for the selected asset class. Life insurance assets are included in the current portfolio listing, but they cannot be modified.

Please Note: The Market Price column uses the existing holding’s price for the

current portfolio where holdings exist, even if that value conflicts with the price in

the security database. Where new holdings exist only in the proposed portfolio, the

holding price is populated from the security database.

The Quantity and Market Value fields in the Proposed portion of the table can be

manually input by the user, automatically calculated, or determined by balancing the

portfolio.

The Action column between the current and proposed portfolio values determines

the transaction made as a result of the recommendation; i.e. if a security is an actual

holding and the recommended value is less than the current value, SELL appears in

the Action column (or BUY for the opposite case). If a security is a miscellaneous

value or cash balance and the recommended value is less than the current value,

REDUCE appears in the Action column (or ADD for the opposite case).

The Portfolio Totals line at the bottom of the report sums the Market Value and % of

Portfolio columns for the current and proposed portfolios, while the Cash Avail or

Cash Req amount displays at the bottom of the proposed portfolio and appears as a

result of the transactions made. As the advisor simulates transactions in the report,

the proposed portfolio totals recalculate.

Local Buttons

Global Buttons

Buttons




14. The Add Holding button opens a dialog that includes search functionality via entering a ticker,

CUSIP, or description (with auto-complete). There is also a Recent Securities drop-down that lists securities, grouped by asset class, that have been recently recommended by the advisor. The Asset Class and Price fields lock once the security data is loaded from the database.

Please Note: The Add to Account field is required to add the recommended security.




15. When the Buy button is clicked for a selected asset class, a small dialog appears with the asset

class’s recently recommended securities listed (if any). The advisor should select the account to which the security is to be added before selecting a recent security, or the security will be added to the first alphabetically listed account. The advisor can also click the Lookup Holding… link to launch the Add Holdings dialog. Always SAVE when making any changes.

16. The local Sell All button is available only within an individual asset class. If Sell All is selected, the entire asset class will be hypothetically sold. (Partial sales of an individual security can be simulated by reducing the quantity or market value of the security.) Always SAVE when making any changes.




17. The Balance All button balances the entire portfolio, while the local Balance button balances

the specific asset class. Balancing updates the report to show the actions required (i.e. sell, buy, reduce, and add) to align the client’s current portfolio to the recommended portfolio. Always SAVE when making any changes.

Please Note: Investment assets without holdings cannot be balanced, and a message

displays notifying the user of this. Once the advisor adds a holding to the

recommended portfolio in the specific asset class, it can be balanced.




18. Reset clears the actions and sets the recommended portfolio to equal the current portfolio for the portfolio, or for the specific asset class. Always SAVE when making any changes.

Please Note: Security overrides are not permitted, but if a security override is set in

the Fact Finder, that override remains in place if the security is added to a

recommended portfolio.

Please Note: The break down the Asset Classes for Mutual Funds is done within the

Asset Class tab, under either Investment Assumptions or Individual Client

Assumptions. There is a button to be able to choose to break down the Asset Classes

for Mutual Funds. If this is set to Yes, mutual funds with multiple asset classes will be

grouped separately as one bucket, rolled up at the asset class level and appear under

Multi-class holdings.




19. The Risk vs. Return Analysis page compares the client’s existing portfolio against the recommended portfolio and the theoretical optimum portfolios. The graph displays the Efficient Frontier (EF) and Diversified Portfolios (DP) curves. As in the Portfolio Analysis tool, the EF curve assumes up to 100% concentration in a single asset class whereas the DP curve uses a default maximum percentage of 25% in any one asset class.

20. Risk vs. Return Assumptions compares the client’s existing accounts, groups of accounts, or hypothetical portfolios against the Efficient Frontier. The EF is based upon the investor’s preferences; this report provides the user the ability to change the preferences. The advisor can modify which asset classes are included for investments and the minimum/maximum investment constraints in any given asset class.




21. The Trade List page provides a table displaying and summarizing the individual recommended transactions for the client’s portfolio as per the Proposed Actions report. The Approx. Value column is calculated as Recommended Quantity x Market Price.

22. The Tax Impact page shows the estimated income realization that may be caused by performing the proposed investment actions. In order to calculate the Tax Impact of a transaction, the holding in question must have cost basis defined. No proposed transactions include holdings with cost basis specified.

The type of gain is determined by the value entered into the Date Acquired field on the Holdings tab in the Fact Finder. If the Date Acquired is less than or equal to (1) year, the income is reported as short term gain (ST Gain); greater than (1) year is long term (LT Gain). If no value is entered, the income appears in the Other Gain column. Losses are reflected as negative gain. Items with no holdings or no holding cost basis are listed in the lower Other Transactions table.

23. The Investment Policy page provides management boundaries for a client’s accounts in the

Please Note: Qualified assets are excluded from the report, and only items with

holdings and holding level cost basis appear.




proposed portfolio according to investment constraints set by the advisor. If no target portfolio has been set, the most conservative model is used as the default target.

Text on the report varies slightly from that which appears for standard clients since the risk level/range is unknown for organizational clients. The advisor can manually input minimum/maximum constraints for each asset class, which appear listed in a table. The minimum must be less than the current and greater than or equal to 0. The maximum must be greater than the current and less than or equal to 100. The advisor may also select a variance from a drop-down which will auto-calculate the constraints across each asset class. The percentage set will be added to or subtracted from the Initial Allocation percentage of each asset class to arrive at the Minimum and Maximum allocation values.




The report includes (2) frequency drop-downs in a Portfolio Monitoring section at the bottom of the report. Here, advisors can set policy statements pertaining to how the client’s portfolio will be monitored by the advisor for:

Investment performance reporting (default every 3 months) Re-evaluation of the client’s investment goals and risk tolerance and portfolio adjustments

(default every 6 months)




24. Click the Checkbox next to Show Supplemental Pages to show the Coversheet, Table of Contents and Disclaimer pages that will be included in the presentation. Click the Checkbox next to Show Excluded Pages to show reports that have been excluded from the presentation.

25. Click Go to Presentation when ready to create a presentation.




Any page icon that is shaded red is excluded from the presentation. To include, place a check mark in the box next to the report.

26. To edit the title of the presentation, click Title. Complete the appropriate fields and click Save.

Please Note: Presentation Name is the name of the presentation template that will

show in the Vault, Reports folder for you client. Presentation Title is the title that will

appear on the cover page of presentations generated from this template.




27. To exclude an Item in the presentation, (meaning item will not print), remove the checkmark next to the report name.

28. To View an Online Presentation, Request a Printable Presentation, or Rename the Presentation, click the corresponding links under actions.

Please Note: To send the presentation to the Reports Folder in the client vault, click

Request Printable Presentation. The presentation may then be downloaded and

printed from the vault, or it can be made visible to the client when they access the

vault from the client site.




The Investment Monitor Alert allows the advisor to enable / disable the newly added Investment Monitor Alerts from within Investment Planning Tool.

29. To enable the Investment Monitor Alert, click the Alerts icon in the navigation bar and select Turn Alerts On/Off.

30. Click Client Alerts.

31. Choose the Investment Monitor alert.




32. Click Enable Alert.

33. Click View Investment Monitor now.

This policy rule enables the advisor to establish a series of asset allocation thresholds for an account or group of accounts. An alert triggers whenever the accounts breach the established minimum or maximum threshold for any asset class.




34. Select Asset Allocation and click the Add button next to the Add a Rule drop-down.

35. In the dialog box, click a radio button to select the source for the rule; i.e. the user can either select an IPT presentation and load the account and allocation limit information from the presentation (this is the default if proposal presentations exist), or the advisor can create the rule manually from scratch to monitor selected accounts.




36. Click Next.

37. Define the limits for the asset allocation rule where the source refers to one or more existing accounts. The client’s complete asset class list displays within the Current column populated by the percent of portfolio value for the selected account or group. The user must define at least one minimum as greater than 0% (zero is the default minimum value) or one maximum less than 100% (100% is the default maximum value).




38. Input the constraints for monitoring and click Done. This will add the rule for monitoring during the next daily processing cycle.

39. Reminder rules are simple calendar-based alerts that trigger on a recurring schedule at a frequency set by the advisor. Click Add.




40. The advisor can select from the following types of reminders from the Create a Reminder Rule dialog box.

Each reminder type will have a different alert message: Performance Reporting: this reminds the advisor to send performance reports to the client and is to be used in conjunction with the Investment Policy report Performance Reevaluation: this reminds the advisor to re-evaluate the client’s portfolio and is to be used in conjunction with the Investment Policy report Miscellaneous: this is a generic reminder

investment planning overview - emoney advisor

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