Introduction to Portfolio Rebalancer

Introduction to Portfolio Rebalancer

Schwab’s Portfolio Rebalancer automates the rebalancing process, freeing you from manual, time-consuming portfolio rebalancing tasks so you can focus on serving your clients and building your business. Portfolio Rebalancer is fully integrated within Schwab Advisor Center® and is located on the Trading tab with the Web Trading and Fixed Income platforms to help you stay on task during the rebalancing process and make smarter, efficient trading decisions.

Key features of Portfolio Rebalancer:

  • Rebalance portfolios containing mixed asset classes, including mutual funds, equities, ETFs, fixed income, and cash using near real-time prices with timely balance and position data.
  • Select from four rebalancing modes: Single Account Tooltip , Household Group Tooltip , Multiple-Model Tooltip , and Batch Accounts Tooltip .
  • Construct, import, and maintain securities-based and target asset allocation models. Use securities-based models to create and maintain blended models (models composed of models). Any model or allocation can be created for personal use or use across the firm.
  • Transmit individual or block trades from Portfolio Rebalancer to the Web Trading platform or to Schwab's back-end systems for validation and execution. Allocations for block trades can also be transmitted.
  • Customize preferences and controls by defining exclusions, locks, minimum transaction amounts, cash buffers Tooltip , and more to assist with any rebalance. The setting can be made at the individual account level or across all accounts for personal use or use across the firm.
  • Manage investment universes Tooltip composed of securities you use most frequently or adhere to in your practice.
  • Perform cash-only rebalancing to invest new cash, generate cash, or return a cash balance to a target.

Key information related to Portfolio Rebalancer:

  • To access Portfolio Rebalancer, you must have the Trade Online Tooltip and Access Rebalancer Tooltip security functions set within security administration for your firm for the accounts you wish to rebalance. To rebalance or customize settings at the firm level, you need the Access Rebalancer Admin Tooltip security function.
  • To have the ability to rebalance household or portfolio model groups in the rebalancing modes that support groups, you must have the Access Group Administrator Tooltip security function.
  • Balance and position data may be delayed up to 15 minutes when rebalancing in Household, Multiple-Model, and Batch Accounts modes. Also, prices provided within Portfolio Rebalancer are considered near real-time except for mutual fund positions, which are based on a quote from the most recent market close.
  • Portfolio Rebalancer will not recognize options, rights, warrants, and negative cash values held in client accounts and will exclude them from the rebalance.
  • The application is compatible with major browsers, including Internet Explorer®, Firefox®, Safari®, and Google Chrome™.

Additional features and details of Portfolio Rebalancer include:

Setting up Portfolio Rebalancer

  • With the  Access Group Administrator Tooltip security function, define custom household, model, or batch groups with the Group Manager.
  • Create and edit target allocations with the asset class breakdowns you use most often to rebalance against and determine whether an account (or accounts) meets your asset allocation.
  • Import models from Envestnet | TamaracTM PortfolioCenter®. Models must be exported from PortfolioCenter using the application's Export Wizard.
  • Assign tolerance bands Tooltip to securities within your securities-based models to manage drift and minimize transactions during the rebalance.
  • Blend together previously created securities-based models as a blended model to maximize flexibility. Any change made to the underlying base model will automatically be reflected in the blended model.

Customizing Portfolio Rebalancer with advanced settings

  • Create and maintain a number of customizations and controls to influence the rebalancing process. The settings can be applied to individual accounts or all accounts selected for a rebalance. Also, settings can be made for use by individual users or all employees within your firm.
  • Exclude individual securities or entire product types from being considered in the portfolio calculations during a rebalance.
  • Lock individual securities or entire product types to prevent them from being sold during a rebalance.
  • Set minimum transaction amounts for each product type, and be notified on the Portfolio Rebalancer's Trade List page if trades are generated below those minimums.
  • Use Portfolio Rebalancer's Cash Buffer feature to set aside a cash value or percentage of the portfolio's value for individual accounts or all accounts once trades have been completed during a rebalance.
  • Override Portfolio Rebalancer-provided style and sector classifications with custom values from an outside source you choose.
  • Add or maintain outside accounts to be rebalanced alongside Schwab-held accounts. This setting may not be set at the firm level.
  • Add or maintain a custom list of securities deemed restricted, and be notified any time during the rebalance when they appear in the workflow.
  • Use security equivalencies Tooltip to create custom groups of like securities, or leverage rules-based style and sector-based equivalencies, to minimize trades for individual accounts or all accounts selected for the rebalance.
  • Set preferences that affect resulting trade files coming out of Portfolio Rebalancer—Establish dividend reinvestment preferences for equity, ETF, and mutual fund buys. Also, enable mutual fund linked trades, if desired.

Rebalancing your portfolios

  • Carry forward your last model used to the next rebalancing session.
  • Create block trades under your master account when multiple equity and ETF trades for individual accounts are generated as a result of a rebalance.
  • View charts showing how far your portfolio has drifted from the model you selected, including changes in the holding's dollar value and weight.
  • Print current vs. rebalanced allocation reports for recordkeeping or to show clients.
  • Allocate completed block trades to your accounts, and then import the resulting data into the Web Trading platform.

How do I access Portfolio Rebalancer?
Launch Portfolio Rebalancer from the Trading tab on Schwab Advisor Center.

Is there a fee for using Portfolio Rebalancer?
No. Portfolio Rebalancer is offered free to advisors as part of Schwab Advisor Center.

Do Portfolio Rebalancer settings and models created by one specific user carry over to others within the firm?
They may. Models and preferences created by individuals with Access Rebalancer Admin Tooltip access may be created at the firm level and seen and used by all users at the firm. However, users without this access will not be able to modify models and settings established at the firm level.

How many accounts can I rebalance at one time?
Due to constraints within the Schwab Advisor Center Find/Browse account-selection tool, you cannot select more than 200 sub-accounts for use within Portfolio Rebalancer. Also, Group Manager prevents the adding of more than 200 sub-accounts to a custom group.

Can I create households that consist of unrelated client accounts?
Household groups are user-defined within Group Manager and are intended to be used for related accounts (i.e., a family). In Rebalancer's household rebalancing mode, balance and position information is aggregated for the workflow to minimize transactions, increasing the need to rebalance related accounts.

Can I rebalance accounts held outside of Schwab, such as a 401(k) or other brokerage accounts?
Yes. With Rebalancer's Managed Outside Accounts feature, found in Preferences > Advanced Settings, you may create and maintain accounts containing held-away assets for inclusion in a rebalance. Once created, you may add the outside account on Rebalancer's View Holdings page to be rebalanced with the rest of the accounts selected for the rebalance. The outside account will be distinguished from the Schwab-held accounts with asterisks as well as the account number you established in Preferences.

How do security equivalencies reduce the number of transactions?
When the feature is activated, Portfolio Rebalancer looks for similar securities between the portfolio's holdings and the selected model. If any are found, the feature prevents the "like" client-held asset from being sold to buy the equivalent held in the model. This general logic applies whether you created a custom security equivalency or are leveraging Rebalancer’s rules-based style and sector equivalencies.

Can I save the trade list for another person to review before submitting?
Yes. On Portfolio Rebalancer's Trade List page, you have the option to print or export the page contents for offline sharing or review. An actionable comma-separated-value (CSV) file may also be generated for sharing or review. This file may be imported to the Web Trading platform's Import Trade File blotter for validation and execution.

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

Read about the differences and risks of extended-hours trading.

For more help with Portfolio Rebalancer, contact Advisor Platform Support at 800-647-5465.