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The integration advantage: Fueling agility, precision, and scale in rebalancing, trading, and order management

Speed and accuracy are crucial as investment advisors react to shifting client needs. It’s challenging in a constantly changing market, increasing complexity and legacy processes.

What do top advisors do to meet the challenge? They utilize tactical, tax-aware rebalancing and incremental portfolio adjustments to protect their clients’ interests. That requires readily accessible information and an integrated wealth tech stack that enables advisors to make the right moves – quickly, precisely, and at scale.

To develop the most effective trading approach that considers risk, time sensitivity, and prevailing market conditions, it’s crucial to seamlessly incorporate order execution with portfolio monitoring, pre-trade compliance, rebalancing, and trading activities. Rebalancing and directed trading naturally integrated with an order management system (OMS) allows advisors to handle orders for multiple custodians, establish trade approvals, utilize FIX for streamlined processing, and execute trades to achieve optimal results.

However, advisors still face several challenges to achieve scalable order generation and execution.

These include:

Shifting investment strategies

Ongoing market volatility prompts advisors and portfolio managers to change their clients’ asset allocations and active and passive management strategies to meet their needs. With investment policies shifting to conservative growth strategies, directed trading is becoming prevalent among wealth managers who want to ensure they tie every trade to a target model.

Leveraging multi-custodial relationships

Many RIA firms use multiple custodians to provide clients with more investment options and better safeguard their assets. Controlling order flow among custodians has become more crucial. Using multiple custodians as your firm grows makes it easier to address more of the market and generate more opportunities. However, managing multi-custodial relationships can be highly time-consuming without proper integration.

Errors and delays due to inefficient processes

Relying on manual processes and using disparate rebalancing and order management systems can create significant process inefficiencies that lead to slow execution, which can have detrimental effects in volatile markets. Accessing client information on different systems, reviewing trades with each custodian for accuracy, or reconciling them manually across multiple systems to resolve breaks are time-consuming and tedious tasks that drain advisor productivity – and increase the risk of errors and delays.

How top advisors are transforming their operations

Hundreds of the leading advisory firms in North America are tapping into the power of integrated trading, rebalancing, and order management capabilities to trade more, manage more money, increase margins, and grow their businesses while decreasing operational costs and risk.

These specific capabilities include:

  • Trade order memorandums: Quickly and easily generate trade order memorandums for individual orders and block trades across thousands of orders, and white-label unlimited templates to account for any trading scenario.
  • Confirmations and affirmations: Seamlessly manage DTCC confirms and affirms for various trading parties at the sub-account or omnibus level.
  • Trade documentation and archival: Document trade decisions on a per-trade or per-review set basis and permanently archive all trades created on the platform. Search archives and build a library of unlimited custom queries to execute searches using frequently-used criteria quickly.
  • Trade approval: Set up trade approval workflows with up to three approval levels, requiring approval of all trades or making approval conditional.
  • Review sets: Organize trades into review sets to suit a specific process. Send trades from one review set to another and send review sets from one user to another.
  • Trade review and adjustment: Easily view trades grouped by account, household, ticker, and classification. Quickly adjust auto-generated trades with real-time cash updates, instant restriction validation, and overbuy/oversell alerts.
  • Block trading and allocations: Build block trades by master account or across brokers, tweak allocations, or merge blocks.
    Intra-day position updates: Update positions and cash in portfolios intraday for exported trades. Rebalance or trade accounts multiple times a day using up-to-date data.
  • Trade export: Export trades, blocks, and allocations in a format that can be uploaded to a custodian or broker for execution.
  • FIX connectivity: Leverage FIX connectivity, directly route and execute trades, and receive live order status notifications and fills.
  • Trade-away workflows: Use trade-away workflows to obtain best execution by blocking trades across custodians and executing them at the broker of choice.
  • Placements and algorithmic trading: Trade large blocks and minimize security pricing impacts by manually sending placements for a block or connecting directly with proprietary trading algorithms and strategies across various brokers.

Advantages of seamless OMS-rebalancing integration

The significance of integrated order management and rebalancing is often underappreciated. However, seamless OMS integration with rebalancing can bring many benefits that enhance advisors’ investment strategies. Here are just a few:

  • Faster action on tactical and strategic changes
  • Streamlined operations and workflows
  • Multi-custodial order execution via FIX
  • Improved trade reconciliation
  • Full trade lifecycle management
  • Support for complex directed trading and rebalancing
  • Flexibility to meet specific client needs
  • Enhanced scalability across portfolios

Scaling success

From facilitating quicker responses to market changes to enhancing operational efficiency and supporting complex trading strategies, OMS-rebalancing integration opens up a world of possibilities for advisors and portfolio managers.

By harnessing the power of OMS-rebalancing integration, you gain a competitive edge through faster decision-making, improved efficiency, a more streamlined approach to portfolio management, and the flexibility to cater to your clients’ unique needs while achieving superior scalability across portfolios. It’s a paradigm shift that can revolutionize how you approach portfolio management, making it a vital tool in the modern investment landscape.