Net Worth

Congratulations! You're making fantastic progress. By default, the fourth step of the initial data entry process is Net Worth.

This step is where all the fun happens. Here you will learn how to link bank accounts, investment accounts, and other client assets. Taken together, the items added here will populate the left-hand menu in the Client's Profile.

Bank Accounts

Enter bank accounts manually using the Add Account button.

Select the type of account and indicate the balance. This will be a static number — only linked accounts have the ability to remain up-to-date. Bank accounts are usually projected as cash, but some settings allow bank accounts to be grouped with taxable investment accounts. Click here to learn more about cash management settings. Bank accounts can be owned by the client, co-client, joint, or trust owned.

Credit Cards

Enter credit cards manually using the Add Account button.
To reflect clients paying off their credit card each month, select Pay in full on the Monthly payment amount.
Seamlessly up to date

If you are a Premium or Platinum subscriber, you or your clients can use the Yodlee aggregation to link bank accounts and credit cards.

Investment Accounts

There are three ways to enter investment accounts into a financial plan. In each data entry method, the asset allocation for accounts can be adjusted as needed. The asset allocation for each account will be used to project an annual rate of return and standard deviation used in the Monte Carlo analysis.

The account type, and owner, play an important role in determining how the funds are treated in future cash flow projections.

1

Account Integration

Integrate outside accounts through an integration partner to link clients' investment accounts with their financial plans. Click +Link Account and select the name of the integration partner to bring up the interface to link accounts.

Once accounts are linked through integration, users can view or adjust the asset allocation pie chart by clicking the green "based on holdings / asset class" link to the right of "Asset allocation".

There are three options for determining the asset allocation for integrated accounts:

  1. Based on holdings / asset class: In this scenario, RightCapital will calculate the asset allocation based on the holdings that are linked to the account.
  2. Customized: Allows the user to specify the asset allocation by entering percentages for each asset class. In this scenario, the linked holdings are used to assign the current dollar value, while the customized asset allocation will be used to assign the growth and standard deviation used in the Monte Carlo analysis. When choosing a "customized" asset allocation, the default breakdown is 100% ‘Other’. In order to apply the customized asset allocation, users must click "save" on the bottom right. The current total must equal 100% in order to save the information.
  3. Based on model portfolio: Allows the user to choose any model portfolio available to them. If this option is chosen, the allocation for the account will be set to the asset allocation of the selected portfolio. In this scenario, the linked holdings are used to assign a current dollar value, while the model portfolio is used to assign the account growth and standard deviation in the Monte Carlo analysis. There are seven default model portfolios included in RightCapital. Additional portfolios can be imported through the Nitrogen integration or added manually in the Advisor Portal > Models > Portfolios area.
2

Account Aggregation

Premium or Platinum subscribers can use the Yodlee aggregation (either the advisor or the client) to link their investment accounts by clicking the blue + Link Account > Aggregation button.

Advisors with account aggregation will see a ‘Connections’ panel in the client’s Net Worth tab that displays all the Yodlee connections, the status of each connection, and the number of linked accounts:

Once accounts are linked through aggregation, users can view or adjust the asset allocation pie chart by clicking the "based on holdings / asset class" button under "Asset allocation".

There are three options for determining the asset allocation for aggregated accounts:

  1. Based on holdings / asset class: In this scenario, RightCapital will calculate the asset allocation based on the holdings or asset classes that are linked to the account.
  2. Customized: Allows the user to specify the asset allocation by entering percentages for each asset class. In this scenario, the linked holdings are used to assign the current dollar value, while the customized asset allocation will be used to assign the growth and standard deviation used in the Monte Carlo analysis. When choosing a "customized" asset allocation, the default breakdown is 100% ‘Other’. In order to apply the customized asset allocation, users must click "save" on the bottom right. The current total must equal 100% in order to save the information.
  3. Based on model portfolio: Allows the user to choose any model portfolio available to them. If this option is chosen, the asset allocation for the account will be set to the asset allocation of the selected portfolio. In this scenario, the linked holdings are used to assign a current dollar value, while the model portfolio is used to assign the account growth and standard deviation in the Monte Carlo analysis.

There are seven default model portfolios included in RightCapital. Additional portfolios can be imported through the Riskalyze integration or added manually in the Advisor Portal > Models > Portfolios area.

3

Adding Accounts Manually

Enter account information manually by using the Add Account button to enter an Investment account.

Use the 'Account type' drop-down box to choose the type of account.
Use the 'Entry method' dropdown menu to choose “Enter holdings / asset classes” or “Enter total balance”.
  • When selecting the "Enter holdings / asset classes" method, there are two ways of indicating the account’s value:
    1. Use Add Holding to enter specific tickers for stocks or mutual funds — in which case Morningstar data will be used to update price information on a daily basis.
    2. Use Add Asset Class to provide a broad allocation mix — either Equity/Fixed Income or broken out using Morningstar asset classes.

    Once holdings and asset classes are entered into an account, users can view or adjust the asset allocation pie chart by clicking the "based on holdings / asset class" button under "Asset allocation".

    There are three options for determining the asset allocation for manual accounts using the "Enter holdings / asset classes" method:

    1. Based on holdings / asset class: Only available when the Entry method is set to “Enter holdings / asset class”. In this case, RightCapital will calculate the asset allocation based on the holdings or asset classes that are entered or linked to the account.
    2. Customized: Allows the user to specify the asset allocation by entering percentages for each asset class. In this scenario, the entered holdings and asset classes will be used to assign the current dollar value, while the customized asset allocation will be used to assign the growth and standard deviation used in the Monte Carlo analysis. When choosing a "customized" asset allocation, the default breakdown is 100% ‘Other’. In order to apply the customized asset allocation, users must click "save" on the bottom right. The current total must equal 100% in order to save the information.
    3. Based on model portfolio: Allows the user to select any model portfolio available to them. If this option is chosen, the asset allocation for the account will be set to the asset allocation of the selected portfolio. In this scenario, the entered holdings and asset classes will be used to assign the current dollar value, while the model portfolio will be used to assign the growth and standard deviation used in the Monte Carlo analysis.

      There are seven default model portfolios included in RightCapital. Additional portfolios can be imported through the Nitrogen integration or added manually in the Advisor Portal > Models > Portfolios area.

  • When selecting "Enter total balance" method, users can simply enter the total account balance and then edit the asset allocation by clicking the "customized" button under "Asset allocation". There are two options for assigning allocation in the dropdown menu for the "Enter total balance" method.
    1. Customized: Allows the user to specify the asset allocation by entering the percentages of each asset class. This is the default value when entering a new manual investment account with the "Enter total balance" method. The default asset allocation is 100% 'Other'. This means if a user enters a new investment account but does not update the asset allocation percentages, the account will display as 100% 'Other'. In order to apply the customized asset allocation, users must click "save" on the bottom right. The current total must equal 100% in order to save the information.
    2. Based on model portfolio: Allows the user to select any model portfolio available to them. If this option is chosen, the asset allocation for the account will be set to the asset allocation of the portfolio selected in the dropdown menu.

      There are seven default model portfolios included in RightCapital. Additional portfolios can be imported through the Riskalyze integration or added manually in the Advisor Portal > Models > Portfolios area.

Loans

If you are a Premium or Platinum subscriber, you or your clients can use the Yodlee aggregation to link their loans.

Use Add Account to manually add mortgages, home equity, car, or student loans.

For more information on how to enter specific loans, see the Loan Details page.

Property

Click on Property in the left-hand column to enter information about the Primary Home. Indicate whether the primary home is rented or owned using the drop-down and provide the relevant information.
Use Add Account > Property to add additional properties - Options include Investment Property, Vacation Home, and Land. The land will be treated similarly to an investment property with the distinction that Land does not allow for depreciation.
Selling an investment property
RightCapital allows you to model the financial impact of selling an investment at a future date. Simply use the drop-down menu next to Year of Sale to indicate when the investment may be sold.

The net sale proceeds are calculated as the sale price minus any outstanding loan balance and any expenses. Net proceeds will be included in that year's cash flow. If the client setting uses Traditional Cash Flow, any positive cash flow generated will be invested in the taxable account based on the current or proposed asset allocation.

Taxes - RightCapital executes very comprehensive tax calculations related to investment properties. This includes schedule E, passive loss limitation, at-risk limitation, Sale of Business Property, as well as Schedule D 1250 Gain calculations.
1031 Exchange - In order to illustrate a 1031 Exchange, visit the Profile > Goals > Add Goal > Property > select Investment Property Purchase > Adjust the 1031 Exchange dropdown menu in the data card. For additional information on the 1031 exchange, visit the article: Data Entry: Property Goals.

Insurance

Enter a variety of insurance policies can using Add Account > Insurance, including cash value policies and long-term care policies. See additional information on entering Insurance policies.

Other Assets

To add a business as an asset, or other unclassified assets, click Add Account and select Other:
Lifestyle - Use this to include the current value of various tangible assets in the client's Net Worth, such as a car, a boat, or jewelry.
Note receivable - if clients have loaned money and are receiving payments, use the Note Receivable option to reflect income received from those payments.
Businesses - input information about various types of businesses - LLC, Partnership, S Corp, or C Corp. This page has additional details on how to input business information.

For many details entered into a client's Net Worth, users can decide whether the assets are included in the retirement projections or not.

If an account is set to “Balance sheet only”, it will display as part of the net worth and be included in the balance sheet. But will NOT be included in any of the retirement projections or calculations within the financial plan.
Add even more assets

RightCapital is a powerful tool that empowers you to do financial advising just right. Many types of assets may be included in a client's Net Worth. Learn how to add other types of assets here.

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