Adventures in Rebalancing: The Last Frontier

FA Magazine recently published a good primer on automated solutions for portfolio rebalancing. The article is titled The Last Frontier and was written by James Picerno and it is definitely well-researched. He managed to obtain quotes from industry experts such as Bill Winterberg, Joel Bruckenstein and Michael Kitces, all of whom I have tremendous respect for. The article is certainly a useful resource for any RIA or advisor interested in the basics of rebalancing.

Besides discussing the basic functions of rebalancing, Picerno also gets into some of the more esoteric features that make rebalancing software so incredibly useful. Here is a quote from a lesser-known industry expert:

Technology circa 2013 offers a better way, for reasons that go beyond easing your workload. “You’re also going to provide better service for clients,” says Craig Iskowitz of the Ezra Group, a financial technology consultancy. Rebalancing software, he explains, makes it easier to build and manage custom investment strategies, such as a socially responsible portfolio that closely matches an investor’s preferences.

Portfolio customization has been available for more than a decade on systems such as Fiserv’s Unified Wealth Platform, which is still based on what was formerly known as Checkfree\APL. While it’s true that most of the top vendors in the space offer this feature now, you didn’t have to wait until “technology circa 2013” in order to take advantage of it. Continue reading

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