Custom Asset Classes

Enabling Custom Asset Classes

Availability

❌ Trial | ❌ Basic | ❌ Premium | ✔️ Platinum

If you currently have a Basic or Premium subscription and wish to upgrade to the Platinum subscription to gain access to Custom Asset Class functionality, please contact us at support@rightcapital.com.

RightCapital offers access to use customized asset classes in addition to the standard asset classes shown.

Custom Asset Class functionality includes the ability to:

  • Add additional asset classes under existing asset categories
  • Add additional asset classes under the 'Other' category to reflect specific models/investments
  • Customize correlations between asset categories including the 'Other' category
  • Adjust volatility assumptions for existing and custom asset classes

Special Note

Once Custom Asset Classes are enabled they are unable to be turned off.

Please ensure that Custom Asset Class functionality will meet your needs prior to requesting that it be enabled. If you would like to review whether Custom Asset Classes will work for you please contact our support team. You can also review the webinar we did introducing the capability by clicking here.

Impact on Monte Carlo simulations

When Custom Asset Classes are enabled, we use a different model to generate Monte Carlo scenarios. This is to account for the flexibility provided for updating volatility and correlation assumptions. This granular approach utilizes a standard log-normal distribution model. If you enable Custom Asset Classes you may see slightly different results for existing plans.

How to set up custom asset classes

Once Custom Asset Classes are enabled, a new tab will be visible, labeled  Asset Classes, under Advisor Portal > Assumptions. This will display all existing asset classes and any additional asset classes of your own.

1

Click on Add and select the asset category where you want to add the new asset class.

2

Name the asset class and click Save to add it:

3
Once the asset class has been added, select Asset Return (tab next to "Asset Class") to update the return and volatility assumptions associated with that (or any other) asset class:

Using Custom Asset Classes to reflect additional asset classes within models

Use the Custom Asset Class functionality to reflect different asset classes in the asset allocation models used in RightCapital. For example, if you differentiate bonds by duration rather than sector in your models, add asset classes to reflect categories such as 'Short-term Bonds' and 'Long-term Bonds', and you can update the return/volatility assumptions for those asset classes. Use this to reflect more granular investment classes or alternative asset classes.

From the Model > Portfolios screen, allocate the model based on your asset classes by associating a percentage to the new asset classes:

Then illustrate the impact of using that asset allocation portfolio on the Retirement > Analysis screen by selecting your model as the proposed asset allocation:

Using Custom Asset Classes for tactical models or custom investment strategies

Differentiate yourself from the competition by using the Custom Asset Class functionality to illustrate the client's investments in a tactical or dynamic model that may change over time. Add additional 'asset classes' under the 'Other' category to reflect the strategies used, along with associated returns and volatility numbers:

To show the client the impact of moving from their existing investments to your strategy, go to the Models > Portfolios screen to set up an Asset Allocation portfolio that reflects 100% allocation to your strategy:

You can then illustrate the impact of that strategy on the Retirement > Analysis screen by selecting your model as the proposed asset allocation:

Reflect client's current investment in your custom strategy

For clients currently invested in your strategy, allocate their investments to that strategy by adding a manual investment account and assigning the value to that asset class:

Investment Mapping

Funds that are mapped will not be mapped to any custom asset classes - they will only be mapped to the default asset classes. This includes tickers that are entered directly, accounts that are linked via integration or account aggregation, or model portfolios linked from Riskalyze.

If you currently have a Basic or Premium subscription and wish to upgrade to the Platinum subscription to gain access to Custom Asset Class functionality, please contact us at support@rightcapital.com.