Before adjusting your risk score, you may want to review our blog post on the right and wrong reasons to change your risk score, in which we discuss that changing your risk tolerance in reaction to market performance is an unconscious form of market timing.
If you change your risk score in a taxable account, our software will attempt to transition your account to your new allocation in a tax-efficient manner and minimize capital gains. If rebalancing will generate significant tax consequences or result in wash sales, then we may not trade fully to the new allocation right away. This means your allocation may differ from your target allocation for an extended period of time. When you make additional deposits, receive dividends or when overweight asset classes subsequently trade at a loss we’ll use these opportunities to transition your account to your new allocation.
If these trades will not result in significant tax consequences or wash sales, we typically rebalance your account within one business day.
If you change your risk score in a retirement account, we typically rebalance within one business day. Please note that we do not guarantee the timing of any trades.
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