There are four main obstacles to building wealth for consumers: procrastination, poor spending habits, inflation, and taxes. Of the four, two are personal, one is systemic, and the last is, regrettably, unavoidable.
Most wealth managers work hard to increase their clients’ after-tax returns by reducing the taxes from their investments. This was usually done by avoiding transactions that generated short-term capital gains and using tax efficient investments such as ETFs or equities that do not pay dividends in taxable accounts.
Harvard Business Review (HBR) wanted to know what institutional investors were doing to address urgent global challenges like climate change and human rights. So, they interviewed the world’s largest asset managers and pension funds including the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), as well as the pension funds of Japan, Sweden and Netherlands. While in the past, large investment firms mainly paid lip service to sustainability, this survey found that ESG issues are now considered a top priority by executives across the board.
The effects from the coronavirus pandemic has only begun to ripple through the US economy. We’re in the middle of what could be a 2008-like market downturn and we don’t know exactly when it will end.
However, we can’t forget that 2019 was a year of extraordinary gains for financial markets. The S&P 500 ended 2019 up by more than 28% while intermediate maturity US Treasuries and high-grade corporate bonds returned an average of 8% and 17% respectively CNN Business: Why this is the ‘most hated’ bull market of all time. These advances have caused the value of investment portfolios to swell, with global equities alone producing more than $17 trillion in gains for the year CNBC: Global stock markets gained $17 trillion in value in 2019.
It’s all about seeing the big picture.
Clients are expecting more from their advisors and advisors are responding by shifting away from managing accounts individually towards providing holistic advice at the household level. As the number of accounts per client has increased, the ability to manage portfolios stretched across multiple registration types with a mix of taxable and non-taxable accounts has become critically important.
For many wealth management firms, their portfolio rebalancing software is one of the most critical pieces of technology that they have. While other applications are certainly important – from CRM for managing client relationships, to eSignature for streamlining account opening and eliminating paperwork, to financial planning software that helps guide your clients’ long-term financial plans – arguably no other component has a bigger impact on your clients’ portfolios than rebalancing software. Yet, amongst a sea of vendors offering different sets of features and functionality, almost every rebalancer on the market is hamstrung by one common limitation – they can only review each portfolio a single time during each rebalancing session.
SoftPak Financial Systems, Inc. one of the leading developers of portfolio analytics software announced today that it will be launching their new Universal Rebalancer at the In|Vest Financial Planning conference in New York, July 10-11th. The Universal Rebalancer uses a pair-wise swapping algorithm to get optimal results for any portfolio. This proven technology is currently being used at top investment firms and is now available to RIAs to rebalance thousands of accounts in just minutes while providing electronic trading connectivity to major custodians.