The process of setting asset allocation guidelines is nothing more than deciding which asset "type" or asset "style" to allocate your investment assets. Though such a decision may seem somewhat simplistic, this decision carries more weight than any other in terms of affecting investment results.

The process of arriving at a proper allocation should be derived from a client's specific investment objectives, which are in turn based on needs (liabilities) and risk constraints [these are determined in the development of the overall investment policy]. Concord works closely with our clients to understand their financial needs and limitations. Additionally, much effort is put forth in assisting our clients in examining their mental and structural risk tolerances. This involves examining the tolerance for "worst case" scenarios, as well as the effects of changes in their organization.

The client's needs are weighed against the historic characteristics of investment "types" and "styles" to find an asset mix that has historically produced the client's desired results. Concord performs this process by using Ibbotson's asset allocation modeling software (Encore Optimizer). The Ibbotson package allows Concord to run multiple scenarios using unlimited assets classes. The results, when combined with Concord's allocation presentation templates, allow Concord to produce best and worse case expected returns, while also paying attention to portfolio income and volatility.