One thing that most choosy investors insist on these days is a strategy that is built to be as risk-free as possible, depending on their tolerances.
With that in mind, Scivantage developed a new portfolio-rebalancing module, which it released to advisors on Monday. The module aims to cut out manual processes that advisors now use for keeping single accounts or multiple accounts in line with their clients’ pre-defined risk tolerance levels. The new module will also monitor all portfolios for drift beyond those tolerance parameters.
The system will go live in December, and formally rolled out to advisors in January, said Joe Stensland, senior vice president of marketing and products. Scivantage is aiming to serve the so-called Series 7 full-service market of financial advisors, where he said these services tend to be expensive.
“We introduced the module with the ability to capability, form and functionality without the traditional reconciliation process,” said Joe Stensland, senior vice president of marketing and products. “Trades go in through the rules we’ve set up with the firm.”
Scivantage developed the rebalancing module with technology from MyVest, and makes it available as an application on the Scivantage ProfessionalTM program, according to the company. The new module will let advisors create and maintain portfolio models consisting of mutual funds, stocks and exchange-traded funds (ETFs). An advisor’s firm can create and manage asset allocation models for use by advisors across the company. It can define percentage-weighted or share-weighted models, plus models of models, with multiple tiers; define client-specific restrictions and model overrides and customize rebalance settings a the account level or globally, or both.
“The typical process is for an advisor to go in manually look at positions and propositions make a list of orders, and submit those orders,” Stensland said. “It could take up to a half-hour per account.”
It has several back-office functions, too, like allowing for real-time, straight-through processing of transactions. For this, the new module will use the Scivantage Professional Trade Processing and back-office interfaces. Advisors will also have immediate access to current positions and cash from its books and records system. It will also make use of Scivantage’s automated trade review engine to validate trade orders prior to execution.
At press time, company officials said that it had lined up Southwest Securities, a clearing firm with its own private client group, as a customer to try out the system. Stensland said the company hopes to get four or five firms signed up by next year.