The report titled, "The Importance of Automating Rebalancing" examines the impact of automated portfolio rebalancing on the wealth management process and has showed that automation has led to advisors saving more than 250 hours annually.
The study has found that though 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.
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Further, market volatility has led to advisors looking for new ways to retain clients and gain new customers.
"Providing automated rebalancing tools benefits the client services relationship and provides a retention tool as a differentiator for advisors," said Bill Wagner, vice president, wealth management solutions, Scivantage.
CEB TowerGroup research director Darrin Courtney added, "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."
The study has further found out that advisors are increasingly taking on the role of a portfolio manager, with AUM in this channel increasing to US$403 billion in Q1 2011, from US$360 billion in all of 2010 and US$291 billion in 2009.
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By GlobalDataAutomated rebalancing tools have enabled advisors to increase their productivity, with manual rebalancing process taking 350 hours annually, while the automated process taking only 100 hours.
Additionally, the functionalities that advisors look to automate their portfolio rebalancing process includes asset allocation, portfolio analysis, straight-through-processing (STP), compliance and reporting, rebalancing and system integration.
