The chances are you will never notice the latest addition to our software arsenal. At least that’s our hope. If all goes as planned, the team at KFG will notice a big change in the way we rebalance your portfolio. We are currently installing a rebalancer produced by Tamarac Advisors, considered the gold standard of rebalancing programs.
When we “rebalance” your portfolio we sell or buy those asset classes that deviate from our target allocation by 20% or more. So if your REITs have a target allocation of 10% and they rise above 12%, we sell. Conversely, if they drop to below 8% we buy. Currently we rebalance your portfolio every month.
The addition of Tamarac’s rebalancing software will give us the ability to automatically rebalance portfolios daily. Currently, we do this monthly, manually. It will automatically let us know of the total fees you’ll pay to rebalance, any capital gains due, and funds that have a redemption fee. Currently, we must calculate all this manually. It will also ‘remember’ not to trade various positions that clients want to hold, and avoid doing small trades where the transaction fee is high enough the trade makes no economic sense.
One of Rick’s goals for the past two years is to position KFG to be able to continue to service clients in the event of his disability or death. The implementation of this software takes one more step toward this goal by requiring Rick to implement written policies and procedures around investments, which were programed into the software, that were previously contained only in his head.
Before being licensed to use the software, Tamarac required that Alison and Rick travel to Seattle, WA, last week and attend ‘Tamarac University”, a four-day course in the proper setup and use of the software. Alison will spend the better part of the next month fine tuning the set up. We anticipate being fully functional with the system by this summer.
Our next project will be to retire our 25-year-old performance software program (dbCams) and adopt a new “cloud based” system. We anticipate starting that conversion in the second quarter of this year.
As you might expect, software programs with the sophistication needed to satisfy our high standards do not come cheaply. The initial installation and subsequent monthly maintanence fees of our software represent a significant part of our monthly operating costs. Upgrading and investing in new software technologies allows us to continue to serve you as efficiently and knowledgbly as possible.