A perfect storm has been brewing in the dynamic world of wealth management in recent times. Risk and portfolio managers, investment consultants, regulatory stakeholders, and CIOs have to deal with a tricky minefield of principles-based regulation, a mounting pressure on fees, manual rebalancing processes that have to be managed under pressure, and a choppy market where they have to outperform inflation.
Rebalancing automation is a great way to effectively tackle these challenges. It’s more than a mere response to an ever more complex investment market. A great automation platform and accompanying strategy allow you to proactively take steps towards future-proofing your portfolio management services. Read on and find out how rebalancing automation with Alloq creates measurable value that goes far beyond just cost savings and keeps you on the top of your game in a business environment where the stakes are high!
The hidden cost of manual rebalancing
Manual rebalancing isn’t just old school: It’s a risk hidden in plain sight that’s likely costing you and your clients serious money. Spending those extra one or two hours per month on manually managing an investment portfolio seems harmless, until you multiply that time by hundreds. Then it becomes clear that manual workflows drain valuable time and have the potential to cause delays. The result? More missed opportunities and an increased risk on unintended exposures.
Relying on manual rebalancing often leads to an inconsistent execution of rebalancing workflows and opens up the risk of subjective judgement. A lack of standardized processes means that best practices often vary per client, manager, or region. This sets the stage for hugely disrupting compliance risks and the accompanying fines.
Additionally, a huge reliance on spreadsheets and copying and pasting portfolio data from one system to Excel consumes vast amounts of analyst time and increases the chance of costly errors. While Excel is widely used, navigating the complex web of formulas, data, and financial information without mistakes requires significant expertise and attention to detail. And don’t forget the repetitive and monotonous nature of manual data entry work, which makes it a pretty mind-numbing task. Before you know it, the mind wanders off to more exciting places and more rewarding tasks, leading to a costly typo that negatively affects a client’s investor portfolio and your company’s reputation.
The case for automation: Time, trust and talent
No matter how familiar manual processes may feel, in the long run they carry a lot of hidden costs and are bound to become a liability. Automation offers you the golden opportunity to turn rebalancing from a burden into a benefit by fostering time, trust and talent.
Time: Free up operations and accelerate insight
Automation replaces fragmented spreadsheets with real-time workflows. This reduces time-to-action and frees capacity across your teams. You significantly reduce your vulnerability to errors since you are not scrambling for spreadsheets anymore. Automation allows you to execute trades and manage portfolios consistently across hundreds or even thousands of accounts in minutes instead of hours.
Trust: Built-in compliance and control
In the light of tighter privacy and data protection regulation, compliance and control are more essential than ever. You don’t want to drop the ball in the governance department… Automation, especially when you smartly combine the virtually unlimited potential of modern technology with a strong governance framework, allows you to successfully mitigate risks associated with policy drift and ensure adherence to regulatory requirements. Thanks to built-in audit trails, mandate enforcement, and the integration of compliance control into core systems, automation embeds governance into every decision you make. Forget ad-hoc compliance management and say hello to full trails of logic, the right timing, and trade justification!
Talent: empower people, not processes
Knowledgeable people who are passionate about their profession are often an organization’s greatest, most valuable asset. At the same time these assets are not seldom taken for granted or squandered. Wouldn’t it be great to free your best and brightest minds from repetitive checks and boring manual work, allowing them to fully focus on keeping strategic oversight, scenario planning, and developing exciting innovation efforts? Smart rebalancing automation makes it possible and is likely to put a big smile on the faces of both your employees and customers.
Experience the flywheel effect of automation with Alloq
Time savings help to build trust, whilst trust enables talent. The overall result? Compounding operational excellence and strategic advantage becomes easier than ever! Alloq is built to help you reap the major benefits of rebalancing automation. Replace time-consuming and sub-optimal tools with a single platform that is tailor-made for managing multi-asset investment portfolios in the front-office.
Alloq combines automation, seamless integration, and a vast body of domain expertise, making it the ideal partner for asset managers ready to scale with confidence. Because Alloq originated and steadily grew in the wealth management industry, the platform offers portfolio managers flexibility to do what they do best: Manage portfolios in a balanced, safe and profitable way. You get one robust and user-friendly SaaS solution for managing all of your allocations for institutional asset management. Alloq can be used on any device, automatically generates an audit trail, and meets all the necessary safety requirements.
Want to know more?
Would you like to discover how Alloq helps you move beyond legacy workflows and toward operational clarity? Then let’s talk! Call +31 10 7987188 or send an email to info@alloq.nl and we will get back to you as soon as possible.