How to use Target Assignment within a portfolio to optimize your client’s Taxficient Score®
- Decide what you want the target asset allocation for your client’s portfolio to be
- Open your client’s portfolio within LifeYield
- Click on the pencil icon next to the name of the portfolio
- In the Edit Portfolio Details pop-up menu, click on the Target drop-down menu. Select moderately-aggressive from the drop-down. You will want to leave the equivalent group toggle turned on. This allows LifeYield to optimize the moderately-aggressive allocation based on the different account types your client has, ultimately deciding between active/passive equities and municipal/taxable bonds. Click on the Save button.
- Once you’ve decided on a target allocation, click on each account listed under ‘Accounts’ that you’d like to assign a target allocation or model to. In the Add/Edit Account pop-up, click on the Output Type drop-down:
- If you change Output Type to Trade, this lets LifeYield know that you are able to buy and sell any individual lot that is identified within the account.
- If you change Output Type to Target Assignment, you will need to select a Target Group. You can select a group that you built in your settings or you can select individual target allocations that you’ve built.
- If you change Output Type to Pro-rata Withdrawal this will assist with Income Advantage when you’re making a withdrawal if an account is in a model and you don’t have permissions to sell individual positions but rather you’d like to take money out of the model and the allocation within that portfolio should remain exactly the same. Pro-rata withdrawal will tell Income Advantage that you need to take $X out of an account and the allocation is going to remain unchanged.
- Select Target Assignment from the drop-down and click the Save button. Click on the Generate Proposal button and select Location Analysis. In the Options pop-up, you can choose to enter any short or long term gains. By leaving this set to $0, we are going to assume that you’re going to sell everything and move these clients into a new model. Click the Continue button to run your analysis.