Trading and Rebalancing Service
One of the most tedious tasks advisors face is the administration of their client portfolios. Due to the time and effort required to properly maintain accounts and determine a course of action, many RIAs simply resort to a scheduled rebalancing mechanism. With The Investment Advisor Alliance you build your model portfolios, you assign the appropriate clients, and IAA periodically rebalances the portfolios for you and handles the resulting trades.
IAA Rebalancing is a fully outsourced service for RIAs who embrace the benefits of continuous rebalancing. Normally this would be cost prohibitive, but IAA manages the database and downloads in our environment relieving advisors of the need to administer to yet another set of technology needs. We then complete the process by entering the resulting trades.
Based on your firm's models and directions, IAA will rebalance portfolios and enter trades on your behalf. Giving you the flexibility to design your own models and apply your own research makes you indispensable to your clients. Traditional TAMPs fit you into their offerings; IAA does not force you to hand over your clients or the portfolio design. Usually, the calculations are run at least once a week or when a model changes; but the trades, during a normal course of business and depending on your assigned tolerances, occur far less often.
Advisors may also opt to employ Asset Location techniques and have entire households rebalanced together when designing and assigning their models so clients can receive the most beneficial taxation for the selected securities.
RIAs and their advisors are often uncomfortable and inexperienced when it comes to trading for their client accounts. Proper execution is far more than entering market orders - it takes time, attention, and experience. Without the aforementioned, you can easily be giving up precious basis points of your clients' returns. The need to run the rest of your business, prepare plans, and meet with clients often forces advisors to take the quickest route to execution. This is a perilous practice if your portfolios are not entirely mutual funds or liquid equities. Illiquid equities and ETFs need patience to avoid excessively moving the market with you order. When trading, we take into consideration the overall market direction, indicative value (if any), and the volume and tape of the security with respect to the generated order. Additionally, we handle the aggregation and allocation of trades so no client is disadvantaged.
Our experienced head trader, with 15 year experience, including time as a NYSE member, will generally handle larger orders or those in securities that are more volatile and less liquid. The rest of the IAA team is trained and monitored by our head trader.
IAA maintains relationships with several custodians to hold client funds and provide market access. Depending on your needs we can act as a liaison to the chosen custodian, alleviating RIAs of the need to develop their own relationship with a custodian or to use several custodians. This is often the best choice to maximize your benefit of using IAA. In certain cases we may suggest direct engagement for your firm with the custodian and then utilizing alternative paperwork.