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For RIAs, New Rebalancing Technology Is Raising the Bar

Advisors that can rebalance complex portfolios in minutes – not weeks – while offering advanced customization are setting the new standard in client service.

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Rebalancing Technology

The last few years have tested even the most resilient, seasoned RIAs. They’ve seen a once-in-a-century pandemic that upended global economies, the highest inflation surge since the 1980s, and the most significant European conflict since World War II, to name a few topline players. Then we can throw in escalating U.S.-China tensions, an ominously inverted yield curve, and constantly evolving recession forecasts – all of which were upstaged in thrilling moments by odd interlopers, such as a nearly instantaneous crypto meltdown and an unnerving banking crisis. And additional dramatic events are likely to come in the U.S. presidential election year ahead.

Rebalancing and managing complex portfolios to adjust for disruptors such as these, both colossal and more quotidian, and to accommodate the universe of other client needs and preferences (such as individual risk proclivities, tax issues, and ESG/DEI concerns) are among the most difficult, tedious, and time-consuming recurring tasks that RIA firms must perform.

“Continued market volatility underscores the need for RIAs to quickly monitor and make tactical decisions across their investment portfolios,” said Lisa Jacobs, Vice President of Customer Management for intelliflo. “This requires readily accessible information to make the appropriate moves based on knowledge at scale, which can only be achieved with the right rebalancing and trading technology.”

If an RIA still uses antiquated manual processes – and data from 2021 indicates that 42% of RIAs still need to add rebalancing technology to their firm’s arsenal 1 – most advisors know well that rebalances can take hundreds of hours of effort. Of course, firms that can afford more modern tools typically dedicate all the technology resources they can to make rebalancing faster. However, many RIAs choose the wrong technology solutions for this vital job (and a multitude of other challenging middle-office functions). As a result, scores of advisors invest heavily (in both capital and working hours) to install a platform that, in the end, doesn’t achieve the results they need and their clients demand.


Not all rebalancing solutions are equal

Their error is understandable. Various technology platforms and products claim to automate portfolio rebalancing for RIAs and promise to reduce the tedium and margin for error in this recurring burden. But in use, several prove to be inflexible or incomplete and only handle a partial list of the RIA’s rebalancing needs. A director of portfolio management at a global asset manager and wealth advisor offers a specific example: “Our [automated rebalancing] solution couldn’t rebalance sleeve or household accounts, which limited our ability to give clients what they needed,” he says.

Additionally, RIAs often find that their rebalancing solution struggles to accommodate all but the most banal client customization requests, forcing staff members to fulfill those duties manually. In addition to lacking customization abilities, the same products may be siloed and unable to integrate data across different asset types and accounts. Or they may not be equipped to execute sophisticated tax strategies. Other automated rebalancing solutions may tackle one or more of these tasks – but offer limited scalability, making them a poor long-term answer for RIAs looking to grow.

Finally, many RIAs want an all-in-one technology solution that will not only automate rebalancing with cutting-edge technology but also handle all of the firm’s day-to-day trading needs, eliminating the need for multiple products and platforms.

“RIAs want scalable solutions that can streamline their business processes today and flex to their changing needs and preferences in the future,” said Jacobs. “They want solutions that easily integrate with other platforms in their tech stacks, maintain custodian-agnostic rebalancing and trading, and let them to use their entire tech stack seamlessly in an all-in-one offering, should they choose that path.”

A comprehensive, flexible solution: intelliflo redblack

intelliflo redblack, an award-winning technology platform, offers RIAs and wealth advisors (of all sizes and levels of sophistication) an all-in-one solution for rebalancing, trading, and order management. The best-in-class solution streamlines and simplifies complex operations – including the most extensive and tactical portfolio rebalances – and daily workflows by applying both standardized and highly customized processes. This creates much greater operating efficiencies, allowing RIAs to manage complex portfolios far more quickly and with less effort at scale – which improves client service while reducing errors and staffing burdens.

Too many RIAs still perform rebalancing and trade reconciliation manually (often using Microsoft Excel), and this, obviously, makes operations grindingly slow while introducing errors. intelliflo redblack eliminates these manual tasks, using its open architecture to execute and reconcile thousands of trades among disparate systems and multiple custodians in a matter of minutes. This can liberate staff from potentially hundreds of hours of work in any given month, freeing them from going through each custodian to review trade accuracy, which is a notorious pain point.

Perhaps, most importantly, intelliflo redblack generates more time for RIAs to spend on the activity that adds the most value to their practices, which is building vital relationships through personally interacting with clients and prospects.

Increasing performance while reducing risk

To remain competitive as their AUM grows and their clients develop more sophisticated needs, RIAs must be able to perform rebalances and other critical operations quickly in response to sudden market movements or world events, as mentioned earlier. But for many firms, it’s nearly impossible to make these moves swiftly enough to benefit all their clients – and they lose key opportunities due to their technology’s inability to execute the trades and workflows before the market has reacted.

With intelliflo redblack, RIAs can direct trades across thousands of portfolios before firms using low-tech processes have even started appraising their capacity to act. These RIAs can focus solely on strategy and objectives without worrying about operational effort or asking their teams to reallocate tech resources to achieve urgent goals. This gives them the freedom to act and respond to market changes nimbly, ensuring their rebalancing and trading strategies remain effectively aligned to increase client service and portfolio performance.

“Advisors need to be continually striving to improve their efficiency and performance, but if they want to execute on their ideas, how quickly can they do it?” asks Jacobs. “If action is delayed, then the best idea or intention is meaningless. That’s why a rebalancing and trading platform like intelliflo redblack to accelerate and scale that process become incredibly powerful.”

Additionally, the intelliflo redblack solution provides real-time compliance and restriction validation, so a RIA’s clients know they will remain invested according to their specific policy statements and other requirements – even after extensive automated rebalancing conducts hundreds or thousands of trades. And intelliflo redblack’s pre-and post-trade compliance tools provide further peace of mind, as they reduce risk by using multi-tier modeling capabilities to improve efficiency and consistency, eliminating, or minimizing potential exposures.

Taking customization to new levels

With the long bull market and the era of ultra-low interest rates behind us, RIAs are being held to higher standards. More diverse clients are demanding greater personalization and “high touch” services, stronger transparency, more precise info, and increased access to alternative and sustainable investments. In sum, RIAs are being called to tailor their services more specifically for clients while offering a more comprehensive range of standard services across their entire customer base – which obviously creates challenges in scaling and growing.

To attack this problem, intelliflo redback offers RIAs extreme flexibility to customize the platform, create tailored functions and applications, and offer the digital experience each specific user is seeking. The platform begins as a blank slate, so RIAs and their end clients can create custom views, dashboards, and workflows best suited to their needs and preferences. This extreme customization extends to intelliflo redback’s advanced rebalancing and trading technology, which allows RIAs to create and manage custom portfolios for clients with a spectrum of objectives – including tax efficiency, diversification, personalization, and values-based investing quickly and easily. Intelliflo redback’s custom rules feature also allows more efficient portfolio management, as RIAs can use it to drive down the number of trades by specifying detailed execution criteria.

To further increase intelliflo redblack’s personalization, each RIA with more than $1.5 billion in AUM has access to a relationship manager, and, of course, every user has access to the support desk. These support advantages are another differentiator between intelliflo redblack and other digital rebalancing and trading platforms.

“Partnering with intelliflo redblack has given us the flexibility, scalability, and support we need to constantly evaluate and improve our technology and processes,” said Patrick Chase, Executive Director of Enterprise Applications at Fiducient Advisors.


intelliflo redblack cloud brings new access and agility

Launched in 2021, intelliflo redblack cloud empowers RIAs and their clients to access its full features and robust functionality in a cloud-based, software-as-a-service (SaaS) package, providing faster onboarding and greater convenience and cost savings.

Without needing to invest in tech infrastructure or worry about minimum system requirements, RIAs of any size can use intelliflo redblack cloud to give their employees and clients secure, 24-7 access to the leading rebalancing and trading platform regardless of geography. The solution uses a multi-tier model designed to seamlessly scale as the RIA firm grows, which is no doubt another driver of its swift adoption: intelliflo (which supports over 30,000 financial advisors worldwide, representing over three million end-investors with over $1 trillion serviced across our platforms) reports that three out of four new clients are choosing the cloud version of intelliflo redblack.

“Since going live on intelliflo redblack cloud, we’ve improved operational efficiencies, business continuity, and overall agility in a highly reliable cloud-based environment,” said Steve Tuttle, Chief Investment Strategist at Signet Financial Management. “The solution’s multi-tier model capabilities will be critical as we continue to customize portfolios across different accounts at scale, and grow steadily in terms of assets, strategies, and clients.”

By tapping advanced technology that brings unique capabilities, cutting-edge speed and efficiency to workflows, RIAs can thoroughly automate the most tedious, time-consuming aspects of rebalancing, trading, and portfolio management.

The resultant gains will not only cut operational costs and increase profit margins, but also free up team members to do more creative work that adds more value. They will empower advisors to make better investment decisions in real-time and give clients better service. They will provide the scalability that allows growth. And most importantly, these gains allow advisors to spend more time each day talking with clients, old and new. Combined, the synergy of these effects can be a game-changer for RIAs seeking to reach new client segments and expand their businesses.

“Regardless of their size, RIAs understand that it’s not just about having technology, but having the right technology will help them grow their business, whether it’s organically or through M&A activity,” said Jacobs. “intelliflo redblack is well-positioned to serve the needs of all types of RIAs and support their businesses in whatever model they choose, allowing us to continue to widen access to financial advice in the US market and globally.”

Book a customized demo to learn more about intelliflo redblack.

1 Cerulli: U.S. Advisor Metrics 2021 Client Acquisition in the Digital Age: https://www.cerulli.com/reports/us-advisor-metrics-2021

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