Q: What does the Transition Analysis Tool do?
A: It evaluates potential transitions of an account to a new target allocation, considering tax implications, current holdings, and target weights.
Q: What is the purpose of the Tax Budget?
A: It sets limits on capital gains/losses during the transition, guiding which positions to liquidate. The transition tool applies tax budgets specifically to positions within the Transition sleeve or the Managed Portfolio sleeve (if used for the transition). Once an account is allocated to model sleeves, these sleeves operate independently and trade back to their respective manager targets. This independence means that the original transition budget no longer governs these trades.
Q: Can SMA accounts use the Transition Analysis?
A: No. SMA (Manager Traded) accounts are not supported.
Q: Are bonds and options included in the tax impact calculation?
A: No. They are excluded and cannot be placed in the transition sleeve.
Q: What is the difference between the Guided Tour and Self-Guided Route?
A: Guided Tour is a step-by-step walkthrough for new users. Self-Guided Route lets experienced users navigate independently.
Q: Can I manually control the transition instead of using the Scheduler?
A: Yes. You can set “Scheduler Off” to manage liquidations manually.
Q: What happens if a model needs a position that sits in the Transition Sleeve?
A: The system journals the position from the transition sleeve into the model sleeve automatically. Positions allocated to model sleeves trade freely to their manager targets if trading is enabled, without considering the transition budget. Moving assets between sleeves does not reset the transition, as the system treats positions outside the Transition sleeve as already transitioned.
Q: Does the system provide a time estimate for transitions?
A: No. Duration depends on budget settings and market conditions.
Q: Does the Transition Tool adjust the target allocation based on holdings in the Transition Sleeve?
A: No. It allocates funds into the target as defined, minus the value in transition.
Q: How does the system handle leftover budget from the initial transition?
A: Any unused budget is carried forward into the Transition Sleeve. Once exhausted, the system assumes $0 budgets unless updated. The only adjustment available without a full reset is changing the transition budget, which applies only to positions still in the Transition sleeve.
Q: How do I update the budget or settings (Target, Tax Budget, Scheduler)?
A: Use the Pencil icon to edit. Changes apply immediately. However, limitations exist when model sleeves are allocated, as the system does not allow transitions to be restarted or recalculated automatically after allocations have been applied.
Q: What happens at year-end to budgets set in the Scheduler?
A: They continue unchanged. Advisors must manually adjust if needed.
Q: How do I finalize and submit a transition?
A: Review the Tax Impact Summary and Sleeve Breakdown, then click Submit. A confirmation or error message will appear.
Q: What does the tracking error measure?
A: It compares the transition scenario allocation against the 100% target allocation.
Q: Can an account have multiple transitions?
A: No. Each account has one Transition Sleeve, which remains active until all positions are transitioned. If you need to fully restart a transition after allocating an account to model sleeves, you must remove all model sleeve allocations, consolidate the account into a single Managed Portfolio sleeve, and initiate a new transition from the consolidated state.