How Portfolio Rebalancer Tools Can Help Your Firm Grow

How Portfolio Rebalancer Tools Can Help Your Firm Grow

By Mark Bevington

If you paid any attention to news headlines, you know that there were some pretty substantial and disruptive events over the last year:

  • Britain losing its longest-reigning monarch ever
  • The invasion of Ukraine by Russia
  • The largest Powerball win in history

There’s a lot more, and that list doesn’t even get us into soaring inflation and a dramatic fall for stocks and bonds. Amid the craziness, many advisors were left dealing with emotionally fraught clients watching their retirement plans fall apart.

But amidst constant change, one thing that never changes is the ability for great technology to help ease the burden of turbulent markets for financial advisory firms.

Specifically, portfolio rebalancing software can help keep investments in line with risk tolerances and provide peace of mind to both advisors and clients. Here’s how.

The Value of a Portfolio Rebalancer

Simply put, a portfolio rebalancer tool is essential for advisory firms.

Rebalancing client portfolios is a core strategy for keeping them within specific risk tolerances and avoiding drift as the market fluctuates. But it can also be time-consuming. After all, each of your clients has unique goals, asset allocations and risk preferences – all of which must be taken into account in the rebalancing process.

One of the best ways to tackle this necessary but often inefficient task is to create repeatable systems set on regular timelines. For example, you could align client portfolios to models to help manage them more efficiently. If you choose to rebalance on regularly scheduled basis, that could bring consistency and order to your portfolio management process.

But even if you have a great system in place for tackling rebalancing, you’ll likely still need to utilize some sort of portfolio rebalancer software to keep up with the workload.

Also keep in mind that rebalancing isn’t purely a numbers game. As an advisor, you have to consider long and short-term goals, tax implications and the market as a whole – and you need a tool that supports that holistic approach to your client portfolios.

Luckily, portfolio rebalancing is one of the key features in some investment portfolio management software programs, which could be the answer your firm is looking for.

Common Problems with Portfolio Rebalancing Tools

While portfolio rebalancing tools can be incredibly useful, many can come with a few complications.

A majority of these tools are built as one-size-fits-all, so they’re tooled for the largest, most robust possible use cases. Applying enterprise-level tools to the typical midsize RIA is an overwhelming task even for the most efficient portfolio manager.

On the other hand, some portfolio rebalancing tools may not be complex enough for you, lacking custom workflows and tools they want to use, ultimately limiting the effectiveness and efficiency of the tool (and the team).

Without the proper portfolio rebalancer, you run the risk of replacing your current system with an equally complex and frustrating process. The right solution for your firm should increase efficiency and deliver better results for both your advisors and clients.

How to Find the Right Portfolio Rebalancer Tool for Your Firm

Portfolio rebalancers can help enforce consistency by implementing rules-based processes and workflows to maintain order. They also improve oversight by delivering valuable data insights and enabling tax-efficient portfolio management.

Moreover, a portfolio rebalancer tool allows you to manage your portfolios at scale, making it easy to manage hundreds – or even thousands – of clients efficiently. Here are related resources for asset managers: Manage accounts across sponsors and custodians with ease.

Craig Iskowitz, Founder and CEO of Ezra Group, recommends advisors look for these four features in portfolio rebalancing tools:

  • Automated rebalancing, including multiple approval levels for trading and compliance oversight
  • Security or Asset Allocation Model management
  • Tax management
  • Flexible user interface for advisors

You’ll also want to consider whether the software has a foundational API that can interact cohesively with other pieces in your tech stack.

Flyer’s Co-Pilot software is built with an open API, and is integrated with industry leading investment management solutions to create a tax-efficient portfolio rebalancing platform for advisors looking to scale their business without sacrificing client results.

In short, portfolio rebalancing tools can help enforce consistency, improve oversight and enable tax-efficient portfolio management. However, it is important to choose a tool that fits your needs, taking into account the complexity and functionality of the tool.

Find Efficiency with Flyer

Don’t spend your time manually rebalancing client portfolios or learning overly-complex software that doesn’t really deliver.

Connect with a member of the Flyer team today and get started with our top-notch portfolio rebalancing tools.


For more about PMS, check out our Portfolio Management Software Guide