Portfolio rebalancing can be a time consuming and largely inefficient task if attempted manually. That is why portfolio management software and rebalancing solutions have become so popular. However, not all solutions will necessarily fit the needs of a particular financial advisory firm, depending on a number of factors. As an example, Envestnet Tamarac (www.tamaracinc.com) is a well-known, highly efficient solution for portfolio management and rebalancing. But its sophistication (and corresponding price) may or may not fit a firm, particularly a smaller firm with more modest needs. The truth is, in the world of financial advisors, there is no one-size-fits-all approach. Different tools are needed for different circumstances. It is important to evaluate such tools based on the specific needs and budgetary constraints of the financial practice.

For those firms with less sophisticated needs and/or budget constraints, there are two relatively new solutions worthy of checking out and one firm that has been around awhile that deserves a second look. The first of these is a company called RedBlack (www.redblacksoftware.com). RedBlack touts itself as rebalancing simplified. It offers a wide selection of import sources, such as TD Ameritrade’s Veo platform, Fidelity, Schwab, Advent and many others. It recently announced an integration with Scottrade as well. The platform has a dashboard feel with account breakdowns, account value distributions, recent filings and reminders, such as expired restrictions.

RedBlack has the capability of rebalancing across multiple accounts, pulling trade logs for verification purposes and monitoring cash balances. In addition to pulling data from Veo, it can also export data back to Veo for monitoring. It has comprehensive trade block reconciliation features and the software can rebalance between tax-deferred and taxable accounts automatically on a global percentage basis. RedBlack can also create an IPS with data imported from such financial planning sources as MoneyGuidePro (www.moneyguidepro.com).

Financial models can be created in one of three ways: 1) by asset class, 2) by security type or 3) by a model of models approach. This provides a high level of flexibility in creating and managing investment models for clients.

RedBlack can run household drift reports to see who is out of tolerance (based on standards established by the financial advisor) and then set up work flows to do the rebalancing. And while there is a lot more detail to what it can do, it is fairly intuitive software with an easy-to-understand desktop interface. Jeff Comstock, director of client relations at RedBlack, says the price is based on a number of factors, including the number of users, the size of the firm’s AUM and what modules may be selected. With RedBlack, the financial advisor can select the specific modules that he or she may need and save money over those solutions that have an all-or-nothing approach.