The Asset allocation tab of RightCapital's Investment module provides pivotal insight into a household's asset allocation as of today. You can access this module within the Investment > Asset Allocation tab of each client plan:
The Asset Allocation tab is divided into two subtabs: Summary and Details. See below for an overview of each subtab.
The Summary tab of the Asset Allocation module displays two pie charts, comparing the household's current allocation to a chosen target allocation. The projected annual return and standard deviation of each are displayed below each chart, and a percentage breakdown by asset class is provided in the center:
By default, the Current Allocation will be set to 'All Accounts'. This provides an insightful look into a client's big-picture investment allocation, blending together all of a household's invested assets into a single, overall investment portfolio. Allocation information is pulled from the Net Worth section of the Profile, where all of a client's investment accounts are entered.
Note on Annual Return & Standard Deviation
The Annual return and Standard deviation percentages that display beneath the Current allocation are a result of the way a client is individually invested, in tandem with your advisor-specific asset return assumptions. You can read more about asset return assumptions here:
Using the dropdown menu above the current allocation pie chart, you can choose to isolate individual accounts, entire groups of accounts, or any customized combination of accounts. Use this feature to view asset allocation by owner, tax bucket, or specific account type:
On the right side of the page, you can compare a client's current allocation to a specific Target Allocation. The dropdown menu above the pie chart offers the ability to change the target allocation to any model portfolio built in RightCapital, including custom models.
Learn more about model portfolios...
To learn more about our default model portfolios in RightCapital, as well as how to create your own custom models, feel free to reference the link below:
In situations where you plan to make a recommendation to clients in terms of shifting their investment allocation, the target allocation enables you to clearly demonstrate to clients how they are invested today, the portfolio that you are recommending, and the major differences between the two. The Action Items at the bottom of the page will even calculate and display the changes required in dollar value to re-align a client's investments with the chosen target allocation:
The Detail tab allows you to see a more granular asset class breakdown for both the current allocation, and the target allocation. In addition to specific asset class percentages for each portfolio, you'll also find visuals clearly demonstrating whether the current allocation is over or underweighted in a particular asset class compared to the target:
When the bar graph extends to the left of the midline (0%), this indicates 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. You can hover your mouse over the bar chart to display the % difference between the current and target portfolios for each asset class.
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