Rebalancing Best Practices Using the Tools You Already Have

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T3 Conference 2009 Update on Rebalancing
Software Darby Armont, CFP Richard P. Slaughter
Associates Barrett Ayers Adhesion Wealth Advisor
Solutions Connor Wilson Tamarac Sheryl Rowling
Total Rebalance Expert (tRx) Gobind Daryanani
iRebal
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Rebalancing Best PracticesUsing the Tools You
Already Have

• Darby Armont, CFP
• Vice President
• Richard P. Slaughter Associates, Inc.

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My Rebalancing Tool
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Firms Trading Statistics

• 2008 Total Trades 21,300
• Client Accounts 1,049
• 2 Firms
• 4 Custodian Platforms
• Multiple Stock, Bond, Mutual Fund and ETF Models

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Tools You Already Have

• Excel
• Position Data from Custodians
• Ability to Upload Files to Custodians
• Rebalancing Tools from Custodians
• PortfolioCenter Export Wizard

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PortfolioCenter

• Download and Reconcile Daily Transaction
  Information
• Set up Models (Security-Based)
• Rebalancing Export
• Cross Reference by Security Report

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Calculate Trades

• Sort, Auto Filter, Copy/Paste, Subtotal, Formulas
• Macros
• Cash Symbol Conversion
• Check for Cash Availability
• Format Trade Ticket
• Format Import File
• Place Trades with Custodian and Allocate

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Best Practice Rebalance!

• Many advisors dont have time
• Need consistent approach
• IPS and financial plan
• GIPS
• Downgrades/market volatility
• Liability

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Best Practice Client Discipline

• Keep accounts clean
• Set expectations up front re pet stocks,
  client-directed buys and sells
• Establish non-managed master
• Stock Exception spreadsheet
• Keep models clean
• Resist temptation to set up multiple models
• Communication

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Best Practice Average Pricing

• Block trading and allocation
• Rotate custodians
• Rotate accounts if trading over multiple days
• Rebalance all applicable accounts
• Documentation

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Best Practice Check for Problems

• Cash availability (trading, management fees)
• Short term redemption fees on mutual funds
• Minimum purchase amounts
• Wash sales
• Long vs. short term gains/losses
• Tax selling

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There Are Drawbacks

• Time consuming
• Multiple steps
• Data quality
• Exceptions are difficult
• Fixed income trading