Asset Switching
Risk Warning
This content is for users of the Wrap Investment Hub and must not be relied on by anyone else. The value of investments can go down as well as up and may be worth less than originally invested.
Before you start
You can instruct an Asset Switch on a model portfolio from the quick link on the home page, from within the summary page or the new work page. Once you select the Asset Switch link a new three step wizard appears. An Asset Switch instruction can only be completed by a Transact User.
Step 1 – Investment Selection
The ‘Investment Selection’ step displays the existing assets and their current target allocation of the model portfolio.
You can edit existing target allocations, remove or add a new asset. To remove an asset you can simply edit the current allocation box to 0%. A new asset can be added by selecting the asset after searching via the investment selection tool and then applying a target allocation.
Please note: The total of all asset allocations must add up to 100%.
Within the ‘Investment Selection’ step you can apply the asset switch changes ‘permanently’ or on a ‘temporary’ basis:
- Permanent: If the tick box field ‘update permanent model allocations’ is selected, the model portfolio target allocations will be updated when the asset switch wizard is submitted. Any future rebalances or new investments will be applied as per the updated target allocation. The default position of the tick box field ‘update permanent model allocations’ is that the field is selected.
- Temporary: You can deselect the ‘update permanent model allocations’ tick box field. If this field is deselected, and the asset switch wizard is submitted, the asset switch trades will still be processed but the model portfolio target allocation will not be updated. When a future rebalance instruction is submitted the change instructed via the asset switch wizard would be undone and individual customer accounts would be rebalanced back to the original target allocation of the model portfolio.
Once you have completed the investment change, click the ‘next’ button to progress on to Step 2.
Step 2 – Exclude Clients
The ‘Exclude Clients’ step allows you to exclude individual accounts from the switch request. You can enter account numbers individually in the ‘Account Number’ field, separating each account number with a comma.
Alternatively, you can click on ‘Download model accounts’ which will list all accounts currently in the model. The document can be edited to only show the accounts you want to exclude. Once saved, you can upload the document and this will populate the accounts to be excluded in the ‘Account Number’ field.
A list of the individual accounts that have the ‘prevent rebalance’ field selected or have just been excluded by you, will now appear in the ‘Accounts to be excluded from asset switch’ section.
Once you have validated the data displayed on ‘Exclude Clients’, click the ‘Next’ button to progress on to Step 3.
Step 3 – Review and Submit
The final step is submitting your instruction.
The ‘Review and Submit’ step displays each of the assets in your current target allocation, plus any new assets being added. If a change has been made to the target allocation of an asset, this will be highlighted in the ‘Change’ column.
Confirmation will be displayed in the ‘Update permanent model allocations’ field If the change to target allocation is to be made permanent .
There is also a summary of the number of accounts being asset switched, being excluded and the total number of overall accounts in the model.
Once you have validated the data displayed on the ‘Review and Submit’ step, you can submit your Asset Switch instruction by clicking the ‘Submit’ button.
You can validate if your Asset Switch wizard has been submitted successfully by viewing the ‘Work Submitted’ tab under the model portfolio main menu.
If you have selected to ‘switch on’ authorisations, your Asset Switch instruction will need to be authorised by a second Transact User.
Shadow model
When an asset switch is requested, updates to the shadow model will only be made if the model portfolio has the “If weightings or assets within the model are edited” option, selected as part of the shadow model rebalancing filters, in the edit model process.
The update made to the shadow model will also depend on whether or not the asset switch has been made permanent:
Permanent: The model portfolio’s target allocation will be updated from the switch date which will initiate a rebalance on the shadow model.
Temporary: The target allocation is not updated. Only a switch trade between the selected assets will be made on the shadow account.