Multifunctional Tools vs. Standalone Solutions: An Ongoing Debate
Date: JAN 12, 2026
To proficiently manage investments for clients, financial advisors are fundamentally reliant on three crucial elements. Primarily, they require a custodian to act as a broker-dealer, facilitating client trades and maintaining accurate ledgers for account verification, position values, and cost basis.
Secondly, a robust trading and rebalancing tool is essential, which should adeptly monitor client portfolios against predefined asset allocation targets, execute rebalancing trades, and produce trade order files for custodians.
Lastly, a comprehensive portfolio accounting and reporting tool is indispensable for generating performance reports and calculating assets under management (AUM) fees aligned with the advisor’s fee structure.
Although there exists a multitude of software options in the portfolio management landscape—including investment research tools, account aggregation for held-away assets, and risk tolerance assessments—these three components form the foundation necessary for operational success.
Historically, the technology required for these pivotal investment management functions developed independently. Two decades ago, an advisor typically utilized one separate tool for performance reporting and another for trading and rebalancing, often complemented by a custodian lacking advanced technological resources.
However, beginning in the mid-2010s, a significant consolidation of portfolio management technology commenced, marking a paradigm shift. This transition was notably exemplified when iRebal was acquired by TD Ameritrade.
Subsequently, entities like Orion and Black Diamond, initially established as exclusive performance reporting tools, began to acquire or develop integrated rebalancing solutions. Companies like Morningstar Office and Advyzon, originating from prior platforms, constructed comprehensive portfolio management tools from inception.
As a result, what was once standard has now transformed; advisors are increasingly opting for singular solutions encompassing rebalancing, trading, performance reporting, and billing, leaving the custodial function typically separate for executing trades.
An early player in the landscape of standalone rebalancing tools was RedBlack. In late 2019, RedBlack was absorbed by asset management giant Invesco during an acquisition spree aimed at enhancing the distribution avenues of Invesco funds within the Registered Investment Advisor (RIA) channel.
This move was indicative of a broader inclination towards consolidating standalone rebalancers, positioning RedBlack as one of the last acquisitions in this category.
Consequently, Invesco integrated its various acquisitions—including the robo-advisor Jemstep and another rebalancing tool, Portfolio Pathways—under the umbrella of Intelliflo as a cohesive portfolio management solution.
Yet, Intelliflo primarily operated as a UK brand with minimal recognition in the U.S. marketplace, resulting in less than 0.5% adoption among advisors as reported in the latest Kitces Research on Advisor Technology.
Recently, the financial sphere witnessed a significant development with Invesco’s decision to divest its Intelliflo business to Carlyle Group.
This transition has led to a bifurcation of Intelliflo’s UK-centric operations from its U.S. business, with the American rebalancing software reverting back to its original RedBlack brand.
In this context, RedBlack re-enters the market as an independent trading and rebalancing tool. Following a myriad of consolidations and the advent of multifunctional portfolio solutions over recent years, RedBlack now stands as one of the few remaining independent rebalancing tools cataloged on the Kitces AdvisorTech Map.
Indeed, out of the eight remaining entities in the trading and rebalancing domain, one—iRebal—has ceased to exist as a standalone offering since Charles Schwab acquired TD Ameritrade. Another, Blaze Portfolio, is slated for closure by the end of 2025.
Furthermore, two other platforms—Smartleaf and Alphathena—are gravitating towards personalized direct indexing rather than generalized rebalancing, while SEI LifeYield offers specialized householding solutions for complex multi-account scenarios.
This development leaves only three quintessential standalone rebalancing solutions available: RedBlack, Flyer Financial Technologies, and SoftPak.
This raises an intriguing inquiry: which RIAs genuinely necessitate a standalone portfolio rebalancing tool in 2025? The age-old debate between advocates of multifunctional “all-in-one” utilities versus those favoring “best in class” standalone applications continues.
Yet, the trajectory of portfolio management technology appears to affirm an overwhelming preference among advisors for singular solutions encompassing rebalancing, reporting, and billing—often due to enhanced integration efficiencies and cost-effectiveness compared to procuring separate tools.
Even should advisors opt for a standalone offering like RedBlack, they would still have to align it with an independent performance reporting tool, a category that has significantly diminished as its providers have coalesced into integrative portfolio management platforms.
Looking ahead, RedBlack seemingly has three strategic avenues. It could either enhance its trading functionalities to rival the advanced capabilities of comprehensive solutions such as Orion, Black Diamond, and Advyzon, seeking to fill market gaps currently unaddressed by existing offerings.
Alternatively, it might opt to enrich its performance reporting features to more directly compete with comprehensive portfolio management systems, presenting a formidable challenge given the fierce competition.
There remains potential for a “lighter” portfolio rebalancing tool void of the CRM and other extensive utilities abundant in all-in-one solutions.
Lastly, RedBlack could find itself in a situation leading to re-acquisition—whether by a current player in portfolio management, a standalone performance reporting system such as AssetBook or EZFol.io keen on evolving into a complete portfolio management solution, or even another asset manager looking for advisor-facing technology to streamline product distribution.
Ultimately, the remarkable evolution of portfolio management technology since RedBlack’s original acquisition underscores a notable trend: despite the elevated costs associated with independent all-in-one rebalancing tools, which can extend into the tens of thousands of dollars annually even for mid-sized advisory firms, a considerable number of advisors have shunned AdvisorTech solutions tethered to asset managers.
This sentiment extends to both RedBlack and platforms such as BlackRock’s FutureAdvisor, which was discontinued in 2023, merely eight years post-acquisition.
While cost and usability undoubtedly impact technology selection, the imperative of independence—ensuring freedom from the influence of asset managers pursuing their own product distribution—remains a vital principle that many independent advisors refuse to compromise when fulfilling their duty to act in their clients’ best interests.
Source link: Investmentnews.com.
