Proposal Generation

What a defensible proposal contains

• The client's stated objectives, time horizon, and constraints — captured in the prospect's words, not generic.
• Recommended asset allocation with the rationale.
• Expected return range and stress-test outcomes anchored in concrete dollar terms.
• Fee structure — total cost, all-in, in plain language.
• Comparison to current state (if the prospect is moving from another firm).
• Disclosures and conflicts material to the recommendation.
• Implementation plan — sequencing of asset transfers, tax considerations.

The two failure modes

1. Too generic — the same proposal for every prospect, with names changed. Examiners and prospects both notice.
2. Too optimistic — return projections that aren't achievable, drawdown ranges underplayed. Creates suitability exposure later.

Marketing Rule considerations

Client proposals are not advertisements when they are one-on-one communications addressing only the recipient's situation. Once a proposal is templated and used broadly, however, the SEC Marketing Rule may apply — particularly to performance presentations and any return projections. Firms with templated proposals should review them under the rule.

Proposal as the foundation for the IPS

A proposal that the prospect accepts becomes the basis for the formal investment policy statement. The IPS should match the proposal's stated allocation, risk profile, and constraints. When they don't match — IPS more conservative than the proposal that was actually sold — examiners have a finding.

How StratiFi thinks about proposal generation

The proposal is the firm's first compliance artifact for a client. Done well, it captures the prospect's actual situation, presents the recommendation with supporting analysis, and sets accurate expectations for what the engagement will produce. The discipline that holds up later — at the IPS, at the first review, at the eventual examination — starts with the proposal.