Overview 

After your firm signs the Sleeves (UMAs or Unified Managed Accounts) Addendum, Orion enables the sleeve functionality for your database and assigns your firm a Trading Subject Matter Expert to assist you with the setup. Please Note: To create sleeves in Orion, you must be trading in Orion Trading or TOM. Failure to trade in Orion causes potential reconciliation, performance, and reporting issues down the line.

To learn more about sleeving requirements in Orion, review the Sleeves - Introduction and Cross-Platform Information article. Then, you are able to begin the setup process for sleeving custodial accounts or registrations. There are three significant steps when creating sleeves:
 

• Ensure all registrations only have one account

• Create Sleeve Strategies or Custom Strategies

• Create Sleeves and Assign Strategies

Please refer to each section below for more information on each of these steps.
 

Ensure All Registrations Only Have One Account

When sleeving in Orion, the first step is to verify that only one account lives under each registration. When you attempt to sleeve a registration that has multiple accounts, the following error message appears: 
 

 

Selecting Yes:
Clicking yes automatically creates a new registration and assigns one of the custodial accounts in the existing registration to the new registration. It is best practice to manually create the new registration or change the naming convention of the new registration to differentiate them from each other.

Selecting No:
This closes the warning, and you need to manually create a new registration and use the Householding app to assign one of the custodial accounts to the new registration that you created.

 

Custom Sleeve Strategies VS Sleeve Strategy Aggregates

Custom Sleeve Strategies are useful when one client has very specific or separate sleeve needs compared to other clients. Custom strategies are created directly in Portfolio Audit, and they must be updated individually.

Sleeve Strategy Aggregates are useful when multiple clients need the same strategy. Aggregates group one or more sleeve strategies together, similar to models in Orion Connect, and are created in the Sleeve Strategy app. Aggregates cannot be tailored to specific clients when assigning them en masse, but using aggregates allows you to streamline the process of assigning sleeve strategies.

There is also the option of customizing sleeve strategy aggregates after assigning them to a custodial account/registration. This essentially turns the "sleeve strategy aggregate" into a custom sleeve strategy for that registration. This means the registration does not receive any more updates from the sleeve strategy aggregate and needs to be updated manually. This process is explained in the How to Create Custom Sleeve Strategies article.

 

How to Create and Update Sleeves

• To create or update sleeves on a registration, navigate to Portfolio Audit  in Orion Connect.

 

• Click on the  tab, right-click on the applicable one and choose :

 

 

• Click  for each sleeve that you need to create for the registration.

• When assigning a sleeve strategy aggregate, select the sleeve strategy dropdown. Custom sleeve is the default; otherwise, choose the previously created sleeve strategy aggregate from the dropdown. For more information, review the How to Create Global Sleeve Strategies and Aggregates article. 

• For each sleeve:
  • Add a Model, Management Style, or Sub Advisor as appropriate.
  • Assign a Target %
  • Upper and Lower Tolerances 
  • Set the Contribution and Distribution Methods. This determines how new contributions and distributions get divided amongst the sleeves. Available options:
    • Sleeve Target – Divides new contributions and disburses new distributions from each sleeve based on its overall percentage targeted to each model in the sleeve setup (Target %).
    • Assigned – Enables a user to set the percentage of contributions/distributions to each sleeve. Enter the value under Contribution % and Distribution % for each sleeve.
    • Most Out of Balance – Instructs the system to divide new contributions or distributions according to which sleeve is furthest from the target.
    • Sleeve Current Percent – Instructs the system to divide new contributions or distributions according to the current percentage of the registration's assets held in each sleeve.

 

• Click Process to finish creating the sleeve accounts or apply the applicable updates when updating a pre-existing sleeve. Orion records the date on which the custodial account is divided when first sleeving out an account. 
  • At this point, all modeled assets and their substitutes, including cash, and are transferred to their respective sleeves. 
  • When cash is available, it's distributed amongst the sleeves according to the Contribution Method selected during the sleeve setup process.
  • All model assets transfer to the appropriate sleeve; non‐model assets included in global substitution groups transfer as well.
  • When an asset is claimed by more than one model in a registration, that asset is divided into the sleeves according to the sleeve and asset targets.
  • Any excluded assets remain in the custodial sleeve.
  • Assets held in the custodial account that are non‐model and not set up as substitutes remain in the custodial sleeve. These assets need to be sold as part of a registration level rebalance. Then, to include them, they need to be transferred to an active sleeve.

 

After you assign new models, this creates additional sleeve accounts under the registration and transfers the assets appropriately. The new sleeves have unique account IDs and numbers reflecting the custodial account number, plus an underscore and a sleeve identifier.