As decided by the PCA Investment Committee, each November we look to rebalance the Global, Pre-Tax, and Post-Tax Models. The committee decided to create a streamlined and uniform rebalance month so that advisors can plan well in advance for any potential changes they would like to make in their client accounts. We chose November because not only will we be able to rebalance the models back to target by year end, we will also be able to accommodate any RMDs or model changes during the rebalance. Since the accounts managed by PCA carry transaction costs when being bought or sold ($9.99 at TDAI), you may want to provide PCA special instructions if you feel accounts may need changes, thus killing two birds with one stone and saving the client additional transaction costs down the road.
Here are a couple items you might want to consider:
- Set money aside for expected upcoming distributions (including RMDs)
- Model change due to financial situation
- Not to rebalance at all due to tax sensitivity or other reason
Here is a quick 6 minute video on a really helpful tool found in Orion where you can easily measure the gain/loss impact on each of your accounts if you request a model change or we rebalance the portfolio. I find this tool very helpful for my Post-Tax accounts.
This year it was decided by the Investment Committee that there would not be any allocation or fund changes. However, due to a generally uptrending market over the last year, accounts may be out of tolerance on the equity side. Therefore, it is necessary to rebalance accounts back to tolerance and to get back to our required 2% cash position. We expect to begin rebalancing accounts the week of November 20 with the expectation of having all accounts rebalanced by November 30.
Also, as an added value, we will review all accounts in the Post-Tax models for short-term capital gains over $1,000 and provide a report to you with the option to exclude those accounts from rebalancing.
We are requesting that you review your client accounts in the Global, Pre-Tax, and Post-Tax models and notify PCA Operations of any special trading instructions for specific accounts. If you do not submit instructions via this secure webform, all accounts in these models will undergo our block rebalance. If you have many accounts with special instructions (20+), please use this spreadsheet template in place of the secure webform to list the accounts and submit via Egnyte to your Trading Submission folder. The deadline to submit any special instructions to PCA Operations is Friday, November 17.
We wanted to send this initial communication out to allow you to have ample time to notify your clients of the upcoming rebalance and to discuss any year end planning issues that may be affected. Specific details of fund and/or allocation changes as well as the exact target date of the rebalance will be provided in the near future.
As always, any reports needed to assist you in reviewing your accounts may be requested via email from PCA Operations at email@example.com.
Thank you for your attention to this matter. We value our relationship with you and appreciate your ongoing business with PCA