How to use Investment Module

Managing your client's investments with excellence is perhaps the first reason why a client sought out your services. RightCapital provides the tools you need to visualize the impact of investments on a client's overall retirement plan.

For a brief overview of the investment area watch this short video.


To access the Investment tab, select the client from your client list, click open client, then select Investment once the client's portal has loaded.

There are five tabs within the Investment module: asset allocation, sector and style, concentration, tax allocation, and holdings. Each tab is covered here. Let's jump into it:

Asset allocation

The Investment tab defaults to the asset allocation screen. Displayed are two pie graphs comparing the current allocation to the target allocation. The projected return rates and standard deviation of each are displayed below the graphs, and the numeric breakdown of allocation is provided within the list in the middle.

On the left side, under Current Allocation, a dropdown menu is available to select "All Accounts" (default) or a specific account to view.

On the right side, under Target Allocation, a dropdown menu offers the ability to change the target allocation to any model built in RightCapital, including custom allocations, or the current asset allocation.

Action Items

The action items on the Investment > Asset Allocation screen demonstrate a specific dollar value to re-align a client's investments with the chosen target allocation.

"Details" sub-tab

Select Details next to Summary to see a breakdown of each asset class, compared by current allocation versus target allocation.

The bar graphs extending to the left of the midline (0%) indicate that the current allocation is overweighted in that asset class.

Bars extending to the right of the midline indicate that the current allocation is underweighted in that asset class.

In the example above, International Equities are overweighted (27% currently, with a target of only 8.5%) and US Corporate Bonds are underweighted (0% currently, with a target of 27%).

Allocation Path

The allocation path allows users to easily illustrate the client's investment strategy over time. The allocation path graph demonstrates the client's age on the x-axis and the percentage of investments held in equity, fixed income, and cash on the y-axis. This visualization easily models a client's shifting investment allocation over their life expectancy.

Adjusting the Allocation Path

Users can leverage the allocation path to model alternative investment strategies within a financial plan. The allocation path can be adjusted using three dropdown menus that include the client's 'starting allocation', 'retirement allocation' and 'glide path' allocation. The default dropdown menus that appear in the allocation path are based on the 'Allocation method' setting that is being used for the financial plan. This allows users to easily visualize the breakdown of equity, fixed income and cash, over time, for different investment strategies.

The allocation method setting can be adjusted in each plan by selecting the Gear Icon > Settings > Methodology > then changing the Allocation Method. If the allocation method is set to “Enable glide path”, users can adjust the starting allocation and adjust which glide path is being used within the allocation path module. If the allocation method is set to “Pre- and post- retirement allocation”, the allocation path will allow users to adjust the starting allocation and retirement allocation. Lastly, If the allocation method is set to “Same allocation for all years”, the allocation path will allow users to adjust the starting allocation.

For more information on the 'allocation method' settings and their impact on a financial plan please click this link.

Note: Changes made to the Allocation Path will not impact the Retirement Analysis planning module. Only the details listed in the Allocation Method settings will be applied to the client's Monte-Carlo analysis.

Sector and style

Equity investments are categorized by sector on this screen. The first tab, Equity Sector, compares the breakdown of investments identified by public ticker symbol to the Vanguard Total Stock Market Index.

The is a visual tool to empower you, the client's advisor, to efficiently diversify a portfolio based on a broad market index. Under Action Items, RightCapital will highlight the most overweighted and underweighted category in the portfolio.

"Equity Style" sub-tab

Selecting Equity Style displays two equity distribution grids, comparing the current allocation to a broad market index.

The action items identify the two categories most out of balance.

Concentration

Diversity is critical to effective long-term portfolio growth. A concentrated position is defined as any position which is equal to or greater than 5% of the total portfolio value. RightCapital will identify these concentrated positions on the Concentration tab.

Tax allocation

The fourth, and last, tab under Investment is the Tax Allocation tab. Here is displayed a pie chart breakdown of how invested assets are categorized by taxation: taxable, tax-deferred, and tax-free.

Tax-deferred accounts include:

  • 401(k) and 403(b) accounts
  • Traditional IRAs
  • SEP IRAs
  • Simple IRAs

Tax-free accounts include:

  • Roth 401(k)
  • Roth IRAs
  • 529 college savings plans
  • Health savings plans
  • Cash Value of insurance policies
  • Any other account manually specified as tax-free

Holdings

The Holdings screen allows you to see a consolidated view of holdings in all client investment accounts.

You can use the drop-down boxes to filter the holdings list by owner, tax category of the account, or individual account. Additionally, click the column headings to sort the holdings list by account name, holding name, quantity, price, or value.

If you click on the green download button in the upper right-hand corner, you can download a .csv file containing the holdings associated with the selected filters.

Note: Cash entered in the 'Cash' field on the Investment card will not be included in the Holdings list.