New money in: a routine for investing a client's deposit
When a client adds money, a small RIA should confirm the deposit has settled, check which strategy the account follows and any restrictions or cash needs, agree the timing with the client if the plan calls for it, place the trades, and record the deposit, the decision and the trades with dates. A weekly check for new cash catches deposits nobody was told about.
A client mentions in passing that they've moved $200,000 from a bank account into their IRA with you. Nobody writes it down. The money lands, sits in cash for five weeks, and the client notices at the next review. Nobody decided to hold it. It just wasn't anyone's job to see it arrive.
The routine
- Confirm the deposit: amount, account, settled date.
- Check the account: which strategy it follows, any restrictions, any cash the client needs soon.
- Agree the timing: all at once, or in steps if that is the plan. Write it down.
- Trade: to the account's strategy, using substitutes where restrictions apply.
- Record it: the deposit, the decision, the trades and the dates.
Catch the deposits nobody mentioned
Once a week, list accounts holding more cash than their model calls for. Most will have an explanation: a reserve for a withdrawal, money waiting on a gradual plan. The rest are new deposits that need a decision.
What should the record show?
| Item | Example |
|---|---|
| Deposit | $200,000 into the IRA, settled 4 March |
| Strategy | Balanced, version 3 |
| Timing decision | Invest in full, agreed with client 5 March |
| Trades | Placed 5 March, on the blotter |
A worked example
Take a hypothetical two-person RIA that adds a weekly new-cash check on Mondays. In the first month it finds three deposits nobody had flagged. Two are invested to the account's strategy that week, with the client told. The third client wants to invest over three months; the schedule is written on the account and each step is noted as it happens.
What are the common gaps?
- Deposits mentioned in conversation and never written down.
- New cash sitting for weeks with no decision.
- Gradual plans agreed verbally and forgotten.
- Restricted securities bought with new money because the restriction wasn't checked.
When is this overkill?
If deposits are rare and always discussed in advance, the weekly cash check alone may be enough.
How Advorra fits
Advorra brings in your custodian's account files, keeps each account's strategy of record, and logs trades on a blotter linked to the strategy, so new cash, the decision about it and the trades sit together. See the product page, or read about monitoring uninvested cash and tracking incoming transfers.
One thing to do this week: list accounts holding more cash than their model calls for.
An operations routine, not investment advice.
Questions advisors ask
How quickly should new money be invested?
That depends on the client's plan and your procedures. What matters is that the timing is decided on purpose and written down.
What if the client wants to invest gradually?
Record the schedule they agreed to and follow it, noting each step as it happens.
How do we find deposits nobody mentioned?
A weekly look at accounts holding more cash than their model calls for.
Should the IPS change?
Not usually for a deposit. A large deposit that changes the client's situation may be a reason to review it.
Is this investment advice?
No. It is an operations routine.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
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