Top 5 Ways Portfolio Rebalancing Software Can Help Advisors

Recent developments in technology tools have enabled independent advisors to run more scalable and modern business practices without sacrificing service quality. Flexible web-based applications have made it easier than ever for financial advisors to deploy a digital advisory experience that is not constrained by traditional roadblocks. With the following top features of portfolio rebalancing software, advisors can more easily scale and trade across their book of accounts while still maintaining a high level of customization and care for their clients. 

  1. Specialized Model Rebalancing

Rebalancing applications allow for an entire firm’s worth of accounts to rebalance to their asset allocation target simultaneously. Such a process can automatically create thousands of trade allocations without a single manual calculation.

While models are typically defined at a high level, client-level and account-level customization are key in making seamless model rebalancing a reality. Accounts can exclude, restrict, or define equivalents to model securities. In this way, when a broad based rebalance occurs, software can understand these various rules, and any customization is factored into the overall strategy. In addition, software can enable users to rebalance only specific segments or positions if a full allocation realignment is not desired.

  1. Parameter-Based Order Creation

Although rebalancing to a model allocation is typically the most scalable workflow for advisors, complex client scenarios can sometimes inhibit such an undertaking. Despite this, streamlined order creation across numerous accounts is still achievable with the unique features of portfolio rebalancing software.

With the help of software tools, advisors can define specific parameters for a trade and then quickly apply that framework across a multitude of accounts. If an advisor is moving out of one position and into another, such a move can be completed operationally in a matter of seconds. Additionally, targeting a position or asset class to a certain allocation can be accomplished without the need for a model.

  1. Tax-Loss Harvesting

Due to the advent of new technology, clients expect a higher level of tax sensitivity for the advisor who maintains their accounts. For a rebalancing application, this expectation can be comfortably satisfied without sacrificing any business scalability.

Both firm-chosen and legacy positions that have a high amount of gains can be restricted in a rebalancing system, preventing a gain from being realized during any sort of trading or rebalancing. Additionally, tax harvesting tools can instantly identify positions that have long or short-term losses, allowing advisors to swap into a similar position to harvest those losses. Such actions can be handled at a high level without the need for any account-by-account trading.

  1. Drift Monitoring

Periodic rebalances have always allowed advisors to fine-tune their portfolios’ composition. However, drift monitoring tools can help investment advisors recognize accounts or strategies that need attention as soon as the need arises. With rebalancing software, drift minimums and maximums can be customized and configured to fit whatever allocation criteria are necessary. Drift alerts can then warn advisors when accounts or households have strayed outside of their tolerances. In this way, investment advisors can always be apprised on what client portfolios need attention at any given moment.

  1. Cash Targeted Rebalancing

Maintaining an appropriate cash balance in client portfolios is a critical responsibility for investment advisors. Whether a client requests cash for withdrawal, or places a deposit in one of their accounts, cash maintenance can be a cumbersome and ever-present process for any advisory practice.

Fortunately, portfolio rebalancing technology can help alleviate the burden that client cash requests put on advisors. Rebalancing tools can allow advisors to deposit or withdraw cash from accounts instantaneously. In addition, specially designed cash rebalancing tools can enable advisors to realign cash to the desired level with the fewest number of trades. In this way, software users can satisfy client cash demands in the fastest and most efficient way possible.


Portfolio Rebalancing Software that Can Help Advisors

BlazePortfolio™ is a web-based rebalancing and trading platform that enables investment professionals to run their advisory practice with a modern and streamlined approach.

With a plethora of scalable software features, BlazePortfolio™ can help advisors accomplish even the most complex trading scenarios without the need for account-by-account intervention. Features of portfolio rebalancing software that can help advisors, like those listed below, allow for easy and automated navigation of these scenarios. 

1. Flexible Model Tools: Tiered allocation models, rules-based restrictions and security equivalents

2. Trade Strategies: Complex and parameter-based order creation at your fingertips

3. Tax Harvesting: Search and swap tax losses at will

4. Drift Analysis: Robust drift monitoring and reporting to focus your attention

5. Cash Rebalancing: Satisfy client cash needs quickly and without stress 

Request a Demo today to find out more about solutions for investment managers and advisors.

Schedule a Demo

With 100+ integrations, you can bring together everything your team needs to communicate, collaborate, and coordinate work, start to finish.