Asset Allocation Checklist

Lead advisor reviews the client's stated goals (retirement income, education funding, legacy, liquidity event) and primary time horizon. Pull the most recent financial plan output from eMoney or RightCapital so accumulation/decumulation phase is unambiguous before allocation work begins.

Run the Riskalyze/Nitrogen or Tolerisk questionnaire and record the resulting risk number. If the new score is more than 10 points off the prior result, document the conversation that explains the change — auditors flag unexplained risk-score drift on Reg BI exams.

Document the required real return needed to fund the plan, plus liquidity needs, tax bracket, and any concentrated-position or ESG screens. Flag held-away 401(k) and deferred comp positions that constrain what we can rebalance inside the household.

Note trust documents, divorce decrees, 10b5-1 plans, restricted stock lockups, AMT exposure, and state-specific muni preferences. For trust accounts, confirm prudent investor rule applies and review the trust's principal/income language with the trust officer.

Refresh the Investment Policy Statement with target allocations, drift bands, and rebalance triggers. Send via DocuSign through Wealthbox or Redtail and store the signed PDF in the client folder; an executed IPS is a standard SEC exam request item.

Use the firm's primary CMA source (BlackRock, JPM, Vanguard, or Research Affiliates 10-year forecasts) for expected return, volatility, and correlation by asset class. If you blend providers, document the weighting — IC minutes should reflect the methodology.

CIO summarizes the firm's house view on Fed path, yield curve shape, credit spreads, and equity earnings outlook in 1-2 paragraphs. Source from FactSet, YCharts, Bloomberg, or Morningstar Direct; cite specific dated reports rather than general commentary.

Examine 5- and 10-year rolling correlations between equity sleeves, core bond, TIPS, and any alts (private credit, managed futures, REITs). Stress the matrix against a 2022-style stagflation scenario where stock-bond correlation flips positive.

Bucket holdings into daily-liquid (ETFs, mutual funds), monthly/quarterly (interval funds, BDCs), and locked (private equity, non-traded REITs). Confirm the total illiquid sleeve is within the IPS cap — usually 10-20% for HNW, lower if there's near-term spending need.

For each asset class, record the assumed return, standard deviation, max drawdown, and Sharpe. This becomes the input set the optimizer runs against in the next phase; revisit annually or when CMAs are refreshed.

Choose the sleeves that will appear in the model: US large-cap, US SMID, developed international, EM, core bond, TIPS, muni (if taxable), and any alts. Drop sleeves where the after-fee expected return doesn't justify the tracking error.

Assign target weights to each sleeve so they sum to 100%. Reconcile against the household risk number captured earlier; a moderate-growth profile typically lands around 65/35 but adjust for client-specific income needs and held-away exposure.

Use Black-Litterman or unconstrained MVO in the firm's tool of choice (Orion Eclipse, iRebal, Tamarac, or Addepar) to produce the efficient frontier. Apply position-size and sleeve caps so the optimizer doesn't recommend a 70% EM small-cap solution.

Set absolute drift bands (e.g., +/- 5% on equities, +/- 3% on fixed income) and a calendar trigger (typically quarterly review). Document whether tax-loss harvesting overrides the calendar; this is the rule the rebalancer enforces day-to-day.

Present the proposed model to the IC with the CMA source, optimizer output, and a side-by-side comparison to the prior allocation. Capture IC approval, dissent, or required modifications in the meeting minutes.

Address each IC comment, document the change, and recirculate the revised model for sign-off before any trading occurs. Trading on an unapproved model is a supervisory finding waiting to happen.

Choose the actual ETFs, mutual funds, or SMA managers per sleeve. Screen on expense ratio, tracking error, manager tenure, and tax efficiency in Morningstar Direct or YCharts; document why this fund vs. the obvious alternatives for Reg BI.

Build the block trade in iRebal, Eclipse, or Tamarac. Apply tax-lot logic — HIFO for taxable, FIFO acceptable in IRAs — and enforce 30-day wash-sale guards across the household, including spouse accounts and held-away IRAs you can see.

Verify no restricted-list tickers, no concentration breach post-trade, no soft-dollar conflicts, and that each account has a current IPS and signed advisory agreement on file. ComplySci or MyComplianceOffice typically runs this gate.

Document the exception, mitigation, and CCO approval before releasing trades. Common exceptions: principal trade on a fixed-income block, cross-trade between household accounts, or an oversize position in a thinly traded muni.

Send the block to Schwab, Fidelity, Pershing, or Altruist. Use limit orders for thinly traded ETFs and stagger entry on positions over ~10% of average daily volume to avoid moving the price.

T+1: confirm every account received its share of the block at the average fill price. Any breaks go to the trade error log immediately — same-day flagging keeps the loss in the error account small and the audit trail clean.

Run the household-level performance report in Black Diamond, Orion, or Addepar with TWR and a benchmark blend that matches the new model. Cross-check against the custodian statement before sending — performance discrepancies are the most common client complaint.

Walk the client through allocation changes, performance vs. benchmark, drift status, and any planned tax-loss harvesting. Capture the meeting in the CRM and note any life events (job change, inheritance, health) that could trigger a strategy revisit.

Open a new IPS revision when a life event materially shifts goals, time horizon, or risk capacity — retirement, divorce, large inheritance, business sale, terminal diagnosis. Don't wait for the next annual review; the current IPS is already stale.

Save IC minutes, signed IPS, optimizer output, pre-trade compliance log, performance report, and meeting notes to the client folder in NetDocuments or ShareFile. This is the package the SEC examiner will request first.