What is the Rebalancer Tool
The SMArtX Rebalancer is designed to allow clients to utilize specified parameters to determine when an account is out of line with its desired state (i.e. Target) and create the necessary transactions to get the account back in line with its target portfolio. This service is dependent on a user assigning a Target to an account (or accounts) and having the Rebalancing toggle set to On from the Account Details page for the accounts to be monitored.
Overall, it is meant to provide clients with a system that reduces the need to monitor each account on a daily basis and reduces the overhead in generating transactions.
Daily Rebalance Review
SMArtX runs an evaluation process each morning to identify accounts that are outside of the rebalance parameters on the account’s assigned Target and flags the account(s) as needing to be rebalanced. Users may find accounts in their rebalance queue as a result of this evaluation and should review/submit those accounts to be traded accordingly.
What Triggers A Rebalance
There are 3 conditions that will trigger an account to be flagged for rebalance:
The Target on an account has been updated (added/removed/changed)
The Account is outside of the Target’s drift parameters when the daily evaluation process was run
The user has toggled the Rebalance button On, then Off and then On again from the Account Details page
Steps to Rebalance
Accounts to Rebalance -
This first section acts as a queue for all your accounts that have been
flagged as needing to be rebalanced
To initiate a rebalance, select the account (or accounts) that you want to submit
Click the Submit Request button to have the system evaluate and generate the trades required to bring your account(s) back to the Target weights and within your rebalance parameters
This evaluation is done in real time which may change the suggested trades
depending on market conditions at the time of submission. For further
clarification, a rebalance submitted at 11AM may have a different set of trades
required to realign the account to the Target compared to the same account
being submitted at 2:30PM.
Pending Approval -
Active Rebalance Requests - this second section is where the user will be able to review the suggested activity to bring accounts inline with the assigned Targets
Users can select View Details to see the suggested trades based on the selected Trade Logic
Best Fit - designed to get as close to target as possible without trading additional assets
Minimum Transaction - designed to get all drifted assets inside their precision bands but minimize the total value of trades
Users can Approve the rebalance request in order to have the system generate the suggested trades
Users can Cancel the rebalance request in order to adjust a Target based on the reviewed trade details or to submit a rebalance at a later time
History -
View Rebalance Requests - this third section acts as a history of all completed rebalance requests where users will need to monitor to ensure there are no post-submission failures
Completed Rebalance Requests will be in one of the following statuses:
Complete - Your submission has been successfully submitted and SMArtX is proceeding to submit orders to your custodian for execution.
Complete with Errors - Some, but not all, of the accounts in your rebalance submission failed. You will need to review the entire submission and address/resubmit the account(s) that failed.
Failed - The rebalance request has Failed and the user will need to review the issue message by clicking on the rebalance submission and reading the Issue field. This indicates a full failure of the rebalance request.
Expired - The rebalance request was submitted but not Approved from the prior business day
Canceled - The rebalance request was cancelled rather than being approved by the user. No trades were requested to be submitted.