Managing your client's portfolios and ensuring the strategy is in accordance with the client's risk tolerance is the foundation of a compliant advisory
program. For RBC Managed programs (Advisor, Resource II and Total Strategy accounts), RBC has established a Fee-Based Programs Surveillance Report in which those of you with these types of accounts should review, monitor and correct if
applicable any issues reflected on your report. I am currently working through these reports now and will be reaching out to offices with any open
items over the next week.
Attached please find a Quick Reference Guide and the Report Procedures. The report is updated weekly and is posted on FA Connect under Fee-Based Programs
Surveillance. You should review this report yourself on a weekly basis and take corrective actions as need with your client's portfolio.
The following are some examples of items on the surveillance report and ways to correct the issue so it is removed from the report:
* Advisor program accounts in which an Advisory Risk Profile of 3 was chosen for the account. Equities in the portfolio are over 80% which has now
taken the account out of tolerance versus the 3 Risk Profile (Risk Profile 3 allows equities up to 80%, above 80% and the portfolio is out of tolerance).
To correct the issue, the advisor would need to either update the client's Advisory Risk Profile to a 4 (4 and 5 - allow up to 100% in equities)
or rebalance the account so it is within the risk tolerance required for the portfolio's profile.
* Resource II program - client may have changed managers and the risk on the new portfolio was different than prior program and was not updated. An
updated Risk Profile would be required, signed by the client.
* Ineligible securities not moved from an account --- move the securities out of the account.
* Concentration of more than 50% invested in one economic sector or single security. Options - Adjust holdings, relate to another advisory account
or make it a brokerage account.
* Cash concentration of more than 50%. Options - invest, move out, relate with client's other advisory accounts or move to brokerage.
Any questions, please give me a call. Thanks, Renee