Automated Portfolio Rebalancing Provides Differentiator for Advisors and Increases Productivity According to CEB TowerGroup Research

Jersey City, NJ - 12 June 2012

Over 250 hours saved annually per advisor through automation

Scivantage®, an independent financial technology provider with proven expertise in online brokerage, tax and portfolio reporting and wealth management applications, and Corporate Executive Board announced today the results of a report titled, “The Importance of Automating Rebalancing”. The study examines the impact of automated portfolio rebalancing on the wealth management process and was jointly authored by the Scivantage team and CEB TowerGroup researchers.

Although historically returns have been higher in a rebalanced portfolio, versus one that is never rebalanced, most advisors have only a basic working knowledge of these benefits, according to the report. Spurred by recent market volatility and headline-grabbing financial news, advisors are increasingly looking for new ways to retain clients and gain new customers. Having the ability to offer portfolio rebalancing, backed by technology that automates the process, will increase advisors’ productivity, while giving them the ability to efficiently expand to new asset classes, reduce exposure to volatility and enhance overall client satisfaction.

“Investors are increasingly expecting their advisor to take on the role of a portfolio manager,” said Bill Wagner, Vice President, Wealth Management Solutions, Scivantage. “Providing automated rebalancing tools benefits the client services relationship and provides a retention tool as a differentiator for advisors.”

“Automated rebalancing technology is changing the advisor landscape. Rebalancing ensures investor’s portfolio remain aligned with their original objectives and appetite for risk,” said CEB TowerGroup research director Darrin Courtney. “The advent of automation in this space will increase straight-through processing desktop integration and allow advisors to use real-time data feeds in their workflow.”

Additional key insights include:

  • Advisors are increasingly taking on the role of a portfolio manager, with AUM in this channel increasing to $403 billion in Q1 2011, from $360 billion in all of 2010 and $291 billion in 2009.
  • Automated rebalancing tools provide increased advisor productivity. Annually, the manual rebalancing process takes 350 hours, while the automated process takes only 100 hours per year.
  • The most sought after functionality for advisors looking to automate their portfolio rebalancing process includes: asset allocation, portfolio analysis, straight-through-processing (STP), compliance and reporting, rebalancing and system integration.

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