Creating and Trading Models through the Advisor Portal

In this lesson, we will demonstrate the process of creating a model, investing a client into the model, and rebalancing the model through the Advisor Portal. From the menu, the advisor expands the Trade menu and selects Models. Any previously created models will be displayed on the screen.

Create a Model

To create a model, advisors select the Create Model button. To the left side of the page is the Model Information where the advisor creates a Model Name, Model Description, and selects the Type. There are two types of models, static and dynamic.

Static models use the initial allocation percentages each time the advisor invests and rebalances the model.

In dynamic models, as prices change the allocation ratios defined with the initial investment will also change. When the advisor rebalances the model, it will use allocation percentages as close to the “new” percentages as it can.

The advisor selects the Add Position button to search for an instrument to add. The advisor repeats this process until all instruments have been added. In the Target % column, enter the desired Model weightings for each stock. When complete, the advisor selects Save Model.

Invest a Client into a Model

To invest a client or a group of clients into a Model Portfolio, the advisor selects the model from the Models page.

The screen will display a Model Summary, including model information, top accounts, and top positions. The Model Accounts tab will display all accounts invested into the model, and the Model Positions tab will display all positions in the model.

All three tabs will contain buttons in the upper right of the screen to Invest or Divest from the model. To invest an account, or group of accounts, into the model the advisor selects Invest. A blue pill icon will be displayed where the advisor can choose to select a single account, group of accounts, or all accounts. The screen then populates the selected accounts and the advisor uses the Amount to Invest column to enter the amount they wish to invest the selected account into the model.

Note there is also a button to the upper right which allows the advisor to invest all independent cash into the selected model. Selecting this will prepopulate the Amount to Invest field with all cash held in the independent side of the account.

To the bottom left, the advisor can select View Advanced Order Settings and has the option to check off the following boxes:

• Use Non-Base Balances When Available: This will use the cash balance of a non-base currency in the Independent side of the client account when an investment requires that a non-base currency be purchased to acquire an asset for the model. 

• Transfer Positions from Independent When Available: When positions are held in an account, they are treated as being Independent or associated with a Model Portfolio. If a client owns shares in a company that is also represented in a Model, it is possible to have them transferred to the Model Portfolio to avoid increasing the holding and risk over weighting the client.

• Avoid Negative Offsetting Cash Independent

Once the advisor is satisfied with the weights, they select Draft Orders. A screen will populate displaying any cash transfers needed from the independent to the model to complete the orders. Select Submit Transfers and the Draft Orders will be created.

The Advisor is brought to the Draft Orders tab of the Orders & Trades page where they can transmit the orders by selecting Review & Submit, delete an order using the trash icon, or clear drafts. The orders can also be accessed through the Orders & Trades tab to submit at a later time. Once the orders have been transmitted and filled, the account is invested into the model.

Rebalance a Model

Once the accounts have been invested, the advisor can rebalance or by selecting the desired model from the Models page. From the Model Summary and Model Accounts tabs, select the three dots icon followed by Set Target Allocation or Rebalance Models. The Model Positions tab also contains a blue Rebalance button. This will launch the Rebalance Model tool and the following tabs are displayed:

• Rebalance Existing Model Targets
• Rebalance New Model Targets

If the advisor wishes to keep the existing target percentages, they will select Rebalance Existing Model targets and click the blue Calculate Order Quantities button. The Order Quantities will populate below and select Draft Order to create the rebalance orders.

If the advisor wishes to set new target percentages, they will select Rebalance New Model Targets. The saved targets will be pre-populated in the Target % column and the advisor adjusts the values they wish to change. If the total percentage is greater or less than 100%, the advisor selects Rescale 100% to rescale the weightings automatically. Note that the total target % must be 100%. Once satisfied, the advisor selects Calculate Order Quantities. The Order Quantities will populate below and select Draft Order to create the rebalance orders.

Divest from a Model

To divest an account from a model, the advisor selects the Divest button and enters the amount they wish to divest from the selected model for the selected account. To fully divest an account, they select the Divest All button.

To the bottom left, the advisor can select View Advanced Order Settings and has the option to check off the following boxes:

• Keep model open for fully divested accounts
• Transfer positions to independent instead of liquidating

Once the advisor is ready to divest, they select Draft Orders. A screen will populate displaying any cash transfers needed from the model to the independent. Select Submit Transfers and, if there are any orders, the Draft Orders will be created.

Model Portfolios can also be created and traded in Trader Workstation. For more information on trading models in TWS, please see the “Getting Started with TWS for Advisors” course in Traders’ Academy.