How to use advanced settings to customize Portfolio Rebalancer

How to use advanced settings to customize Portfolio Rebalancer

Use the advanced settings in Portfolio Rebalancer to customize aspects of the rebalancing process. You can establish what securities to include and how to classify them, how much cash to set aside, the minimum transaction amount, outside accounts to rebalance, and how to format your trade file. You can customize these settings for use with all accounts or for individual accounts.

Before using advanced settings, you will need the following:

  • Trade online Tooltip and Access Rebalancer Tooltip security functions within Schwab Advisor Center®
  • Access Rebalancer Admin Tooltip security function within Schwab Advisor Center to create a Firm Level setting

The following processes can be used to exclude securities Tooltip , lock securities Tooltip , and restrict securities Tooltip during a rebalance. Apply these settings for all accounts or for an individual account.

To access these settings, click Trading > Portfolio Rebalancer > Edit Portfolio Rebalancer Preferences > Manage Advanced Settings.

To add or remove an exclusion on a specific security:

  1. Click Security and Product Exclusions.
  2. To add a new exclusion at the account level, click Create New. Clicking the All Accounts link allows you to set security exclusions to be applied across all accounts selected for a rebalance.
  3. Enter the account number, name, and setting level for the exclusion. An Individual Level setting establishes the security exclusion only for use with your user ID. A Firm Level setting makes the security exclusion available for all users within your firm.
  4. Use the buttons across the screen to add securities to the list.
  5. Click Save and Continue.
  6. A summary of all excluded securities is displayed on the next screen for your review. These exclusions will also appear on the View Holdings page during the rebalancing process. At that time, you will be able to remove the exclusion.
  7. Click Done to save your selection.
  8. To remove an existing exclusion, go to Manage Excluded Securities and check the box on the right to select for deletion. Then click Delete at the top.
  9. To update an existing exclusion, go to Manage Excluded Securities and click on the account number under the Account # column. The Enter Excluded Security screen appears. From this screen you may update and delete your selections. When completed, click Save and Continue.
  10. A summary of all excluded securities is displayed on the next screen for your review. These exclusions will also appear on the View Holdings page during the rebalancing process. At that time, you will be able to remove the exclusion.
  11. Click Done to save your selection.

To add or remove an exclusion on a product type:

  1. Click Security and Product Locks.
  2. To add a new exclusion at the account level, click Create New. Clicking the All Accounts link allows you to set product-level exclusions to be applied across all accounts selected for a rebalance.
  3. Enter the account number, name, and setting level for the exclusion. An Individual Level setting establishes the security exclusion only for use with your user ID. A Firm Level setting makes the security exclusion available for all users within your firm.
  4. Use the buttons across the screen to add securities to the list.
  5. Click Save and Continue.
  6. A summary of all excluded securities and product types is displayed on the next screen for your review. These exclusions will also appear on the View Holdings page during the rebalancing process. At that time, you will be able to remove the exclusion.
  7. Click Done to save your selection.
  8. To remove an existing exclusion, go to Manage Excluded Securities and check the box on the right to select for deletion. Then click Delete at the top.
  9. To update an existing exclusion, go to Manage Excluded Securities and click on the account number under the Account # column. The Enter Excluded Security screen appears. From this screen you may update and delete your selections. When completed, click Save and Continue.
  10. A summary of all excluded securities is displayed on the next screen for your review. These exclusions will also appear on the View Holdings page during the rebalancing process. At that time, you will be able to remove the exclusion.
  11. Click Done to save your selection.

To add, remove, or update a security lock:

  1. Click Security and Product Locks.
  2. To add a new lock at the account level, click Create New. Clicking the All Accounts link allows you to set security locks to be applied across all accounts selected for a rebalance.
  3. Enter the account number, name, and setting level for the lock. An Individual Level setting establishes the lock only for use with your user ID. A Firm Level setting makes the lock setting available for all users within your firm.
  4. Use the buttons across the screen to add securities to the list.
  5. Click Save and Continue.
  6. A summary of all locked securities is displayed on the next screen for your review. These locks will also appear on the View Holdings page during the rebalancing process. At that time, you will be able to remove the lock.
  7. Click Done to save your selection.
  8. To remove an existing lock, go to Enter Locks and check the box on the right to select for deletion. Then click Delete at the top.
  9. To update an existing lock, go to Manage Account Locks and click on the account number under the Account # column. The Enter Excluded Security screen appears. From this screen you may update and delete your selections. When completed, click Save and Continue.
  10. A summary of all excluded securities is displayed on the next screen for your review. These exclusions will also appear on the View Holdings page during the rebalancing process. At that time, you will be able to remove the exclusion.
  11. Click Done to save your selection.

To add or remove a lock on a product type:

  1. Click Security and Product Locks.
  2. To add a product lock at the account level, click Create New. Clicking the All Accounts link locks products for all account rebalances.
  3. Enter the account number, name, and setting level for the lock. An Individual Level setting establishes the lock only for use with your user ID. A Firm Level setting makes the lock setting available for all users within your firm.
  4. Click Product Level Locks to trigger a dialog box.
  5. Check the Add box(es) next to the product type(s) you want to lock. Click OK to return to the Enter Locks screen. A green check mark will appear next to the security in the Locked Product Types section.
  6. To remove a product lock, click Product Level Locks to trigger the dialog box. Click the check mark to remove it from the box next to the product type. Click OK. The green check mark in the Locked Product Types section disappears.

To manage restricted securities:

  1. Click Restricted Securities.
  2. To add a restricted security, click Create New.
  3. Enter the account number, name, and setting level to which the restriction will apply.
  4. Use the buttons across the screen to classify securities as restricted.
  5. Review your selections. If a restricted security is included in a rebalance, alerts will appear throughout the rebalancing process.
  6. To remove a security restriction, click the link for the account with the security restriction.
  7. Click the box in the Delete column next to the restricted security and click Delete.
  8. If you remove all restricted securities from an account, you must also delete the account from the restricted list. The restricted securities list does not allow empty accounts to remain in the workflow. Click the box in the Delete column next to the account and click Delete.

The following process is used to set and modify minimum transaction amounts for each product type at All Accounts or a specific account level to minimize trades.

To access these settings, click Trading and then Portfolio Rebalancer. Click Edit Portfolio Rebalancer Preferences, and then click Manage Advanced Settings.

  1. Click Minimum Transaction Amounts.
  2. Enter the minimum dollar amount for the firm or for individual rebalances.

Trades generated below the set minimums will appear in red on the Trade List during the rebalancing process. You can delete those trades from the Edit Trade List tab.

This process is used to set an amount or a percentage of the portfolio's value to be left in cash after trades resulting from a rebalance have been completed. Cash buffers can be set at the global or account level. An account-level cash buffer will override a global buffer.

To access these settings, click Trading and then Portfolio Rebalancer. Click Edit Portfolio Rebalancer Preferences, and then click Manage Advanced Settings.

To create a cash buffer:

  1. Click Cash Buffers.
  2. Click Create New.
  3. Enter the account number, name, and setting level for the account with the cash buffer.
  4. Enter the dollar amount or percentage you want as a cash buffer. If both are entered, the greater amount will be used in the rebalancing session.

To edit a cash buffer:

  1. Click Cash Buffers.
  2. Click on the account with the cash buffer you want to edit.
  3. To delete a cash buffer, click the box in the Delete column next to the account with the cash buffer you want to delete and click Delete.
  4. Modify the account number, name, or setting level (optional).
  5. Enter the cash buffer value as a dollar amount or percentage.

Style and sector classifications for securities are predefined by Schwab's data providers. You can override these classifications with custom values that align with your data source.

To access these settings, click Trading and then Portfolio Rebalancer. Click Edit Portfolio Rebalancer Preferences, and then click Manage Advanced Settings.

  1. Click Style and Sector Overrides.
  2. Click Create New to create a new style or sector override.
  3. Find the security by typing the name or symbol in the search box. Then click Search.
  4. Click the button under Add for the security you want to add to the list; then click OK.
  5. The first page displays the style classification in the Default Allocation column. Enter your new values in the Security Override column. The values must total 100%. If you do not want to change the style classification, click Copy Defaults and then Save and Continue to proceed.
  6. The next screen displays the sector classification if the security selected for the override has an equity-based component. Enter new values in the Security Override column. The values must total 100%. If you do not want to change the sector classification, click Copy Defaults to proceed.
  7. To edit a style or sector override, click the security link you want to reclassify. Enter your new values and save the changes.

This process is used to add and maintain accounts held at outside custodians and rebalance them with your Schwab holdings.

To access these settings, click Trading and then Portfolio Rebalancer. Click Edit Portfolio Rebalancer Preferences, and then click Manage Advanced Settings.

  1. Click Managed Outside Accounts.
  2. To add an outside account, click Create New. Enter the account number and description for the outside account.
  3. Use the buttons across the screen to add securities to the list.
  4. Add the quantity of shares of each security under Shares. When completed, click Save and Continue.
  5. A summary of all the securities is displayed on the next screen for your review.
  6. Click Done to save your selection.
  7. To edit an outside account, click the account number.
  8. The screen displays account holdings in shares or dollars using the most recent share price. To see the share price, click the link to that security. Change the display unit by clicking the drop-down box on the right. Enter the amounts. Add new holdings using the buttons across the screen. To delete a holding, click the Delete box next to that holding and then click Delete.
  9. To delete an outside account, click the Delete box next to the account number and click Delete.

This process is used to create custom groups of similar securities called equivalencies Tooltip . You can tell the Portfolio Rebalancer which securities to use for an equivalency. You may also use Portfolio Rebalancer's rules-based style and sector equivalencies feature using the application's style and sector classifications for mutual funds and ETFs. Equivalencies help to minimize trades during the rebalancing process, preventing the sale of a client holding for the purchase of a like security in the model selected for the rebalance. Security equivalencies can be applied to all accounts or individual accounts.

To access these settings, click Trading and then Portfolio Rebalancer. Click Edit Portfolio Rebalancer Preferences on the top right, and then click Manage Advanced Settings. Click Security Equivalencies.

To create a new equivalency:

  1. Click Create New.
  2. Enter the account number, name, and setting level to which the equivalency will apply.
  3. To create a style equivalency where Portfolio Rebalancer uses rules to find similar securities based on style, click box 1, Equal style allocation. To create a sector equivalency where Portfolio Rebalancer uses rules to find similar securities based on sector, click box 2, Concentrated sectors. Click both boxes to have Portfolio Rebalancer use rules to find similar securities based on both style and sector.
  4. To create a custom equivalency based on your own criteria, leave both boxes unchecked.
  5. Click Create New.
  6. Enter a name and description for the equivalency.
  7. Add securities you deem similar to the list using the buttons across the screen. When completed, click Save and Continue.
  8. Click Persist Equivalencies On if you want the Portfolio Rebalancer to remember your selection for future rebalances. If the Persist Equivalencies setting is left off, you may set equivalencies on the Select Target stage during rebalancing.

To edit an equivalency:

  1. Click on the link for the account with the equivalency you want to edit.
  2. Modify the description and setting level (optional).
  3. Existing equivalencies for this account will appear on the Security Equivalency List. Click the link for the equivalency you want to edit.
  4. Modify the equivalency name and description (optional).
  5. Add securities using the buttons across the screen.

To delete an equivalency:

  1. Click on the link for the account with the equivalency you want to delete.
  2. To delete an entire equivalency, click the box in the Delete column next to the equivalency you want to delete. Click Delete.
  3. To delete one or more securities from an equivalency, click the link for the equivalency. Then click the box in the Delete column next to the security you want to remove and click Delete.

Equivalencies are activated on the Select Target page during the rebalancing process.

This process is used to set preferences for mutual fund trades and dividend reinvestment that are communicated both in the Excel CSV Tooltip -formatted trade file and trade file sent via trade transmission. You may set preferences to be applied for all accounts or individual accounts.

To access these settings, click Trading and then Portfolio Rebalancer. Click Edit Portfolio Rebalancer Preferences, and then click Manage Advanced Settings.

  1. Click Trade File Preferences.
  2. To create new preferences, click Create New. To edit your trade file preferences, click the account link with the trade file preferences you want to edit.
  3. Enter or modify the account number, name, and setting level corresponding to the trade preferences.
  4. Click the On button in the Linked Mutual Funds row to activate linked mutual funds Tooltip , allowing Portfolio Rebalancer to match up mutual fund buys with sells. Click the Off button to turn off this feature.
  5. Set your dividend reinvestment preferences. Click Cash in the Equity, ETF, or Mutual fund row to have future dividends or capital gains payouts paid as cash. Click Reinvest to use future dividends or capital gains payouts to buy additional shares. Click Cash/ Reinvest to have future mutual fund dividends paid as cash and capital gains payouts reinvested back to the security.

Your preferences will be recorded in the trade file generated from the rebalance. Once recorded, you can transmit the trade file via the trade transmission process or create a CSV-based file to import to the Trade Blotter of the Web Trading platform. Before trades are executed, you must validate them in the Web Trading platform.

  • When you have finished using advanced settings to customize Portfolio Rebalancer, click Exit. Settings remain for your next rebalancing session.
  • Set up accounts and groups using the Group Manager. You must have Access Group Administrator Tooltip access to use this feature.
  • Set up Portfolio Rebalancer with target allocations, portfolio and blended models, and investment universes.
  • Rebalance your portfolios.
  • Contact Advisor Platform Support at 800-647-5465 for help with Portfolio Rebalancer.

Resource: About extended-hours trading

Where do the security asset class, style, and sector classifications in the Portfolio Rebalancer come from?
Security asset class and sector breakdowns used in the Portfolio Rebalancer are from Schwab's data providers. Style breakdown information is culled from a consortium of data suppliers such as S&P and Lipper and is provided by Advisor Software, Inc. You can override predetermined classifications and apply your own in the Style and Sector Overrides workflow in advanced settings.

In cases where I need to enter a constraint at the individual account level (lock, cash buffer, etc.), should I include the hyphen in the account number?
No. The hyphen is not required. If you do not enter it, Portfolio Rebalancer will automatically provide it when entering the eight-digit account number.

Can the product-level lock feature lock products of one type composed mostly of another, such as bond funds?
The product-level lock feature is product-type specific. For that reason, it will not lock a product with holdings composed largely of another (i.e., bond funds, fixed income ETF, etc.). To lock specific products of this nature, utilize either the global or individual account level locks where the specific securities can be identified and locked.

How does the Security Equivalencies feature reduce the number of transactions?
Depending on whether you enable any of the equivalency rules, create any custom equivalencies, and activate the feature during the workflow, Portfolio Rebalancer will look for similar securities between the holdings and the selected model. If any are found, the feature accepts the equivalent holdings as replacements and prevents them from being sold.

How to rebalance your portfolios
How to set up Portfolio Rebalancer
How to use Group Manager
Introduction to Portfolio Rebalancer
Introduction to the Web Trading platform