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How to Streamline the Selection of an Investment Management System


How to Streamline the Selection of an Investment Management System

Written by: Kristen Schmidt


Many advisory firms struggle with the selection of their investment management software. We know there are over 50 choices that range from reporting, analytics, risk, re balancing, optimization, and more. If you want to DIY the research, below is a master list of questions to answer BEFORE vetting the software choices. These answers reduce the amount of time spent on selecting the RIGHT system. They also are great to share with vendors to confirm the vendor offers a solution to each need.

If this list is overwhelming or you don’t have the time or patience to identify the vendors that meet your needs, we are here to help. You can get started with our one-time Boost Call.

We are agnostic to all tech and have no revenue sharing arrangements with anyone. 

Define HOW you:

  • Trade
  • Model
  • Rebalance
  • Invest
  • Aggregate
  • Research Investments
  • Report & deliver to clients

Define current systems you can’t live without (a.k.a. “I hope they integrate with my Portfolio Management System”)

  • Financial Planning Tool
  • Trading/Modeling/Rebalancing Tool
  • Outside Aggregation Tool
  • Investment Research/Analytics
  • Client Portal
  • 401(K) tool

BEFORE you begin researching multiple portfolio management systems, be prepared by answering the questions below.

Your time is valuable so don’t waste it!


Custodial Assets

  1. All Institutional Custodians
  2. All firm wide outside aggregation tools
  3. Methods of how the data flows to current Portfolio Management system
  4. # of open, funded accounts
  5. # of closed accounts to be included in aggregated performance
  6. # of accounts needing reporting only services (no billing/modeling/trading services)
  7. # of manually entered/updated accounts
  8. # of self-directed retirement accounts

Historical Data/Reconciliation

  1. How many years of data will be moving to the new Portfolio Management System?
  2. What is the quality of the data being converted?
  3. Do you manually delete/fix incoming transactions on a daily/weekly basis?
  4. Are asset classes auto-assigned or do you manually assign all asset classes within your current portfolio management system?  What would you like to do going forward in the new system?

Structure of Households/Portfolios

  1. Householding per client, per family, per model, per account, etc.?
  2. Does Household naming convention need to match the CRM?
  3. Will there be multiple Portfolios within one Household?
  4. How will be Portfolio’s be defined?  (Qualified vs Non-Qualified, /Head of Household vs Spouse, etc.)


  1. How often are accounts traded?
  2. How often are accounts rebalanced?
  3. At what level are accounts rebalanced?
  4. How many models is your firm currently using?
  5. What type of model tolerances do you use when rebalancing (Specific %, $ or both)
  6. Do you trade options?
  7. Are you using sleeve accounting?  (Model within a model strategy)
  8. Do you trade mortgage backed securities?
  9. Do you trade private placements? (illiquid securities, REIT’s, etc.)
  10. Do you have excluded assets that need to be considered when trading or rebalancing?
  11. What types of orders do you use?  (Long/short, Market, Limit, Stop, Conditional, Duration Order cancels other, order replaces other bracket trades))
  12. Do you use drift analysis?
  13. Do you use tax lot harvesting review/algorithms?
  14. Explain any reconsideration problems with your current portfolio management system
  15. Are outside assets rebalanced?
  16. Are multiple equivalencies used?
  17. What are your client account cash management habits?
  18. Do you block trade?
  19. What executions do you use?  (Time based, price based)
  20. Do you use “Do Not Sell” restrictions?
  21. Do you review tax implications of each trade?
  22. Is real-time data needed for portfolio monitoring?
  23. Is straight -through processing (STP) functionality needed?)


  1. Performance calculation method – Time Weighted Return, Internal Rate of Return, or both?
  2. Will reports be generated at the Household level, Registration level, account level or a mix of many?
  3. Do you have accurate cost basis for all accounts or are you relying on the Custodian to provide this information?  Have you audited Custodial cost basis info for missing/inaccurate data?
  4. Explain your bench marking interests/methodology
  5. Do family/friends of clients that are outside of the defined household need to receive performance reports?
  6. Will you be mailing reports to clients?  How often?


  1. Do you bill the clients at the household level or per account?
  2. Do you pay out compensation among several advisors for each account, each household OR is each household’s revenue paid out to only one advisor?
  3. Do you have a Rep # structure set up already?
  4. Do you have a Payout structure – with changes and new effective date
  5. Do different accounts pay the fee for certain clients? (This account pays for that fees
  6. Fee structure –  %, flat fee, tiered, breakpoints debit, direct bill, ACH
  7. Frequency of billing (monthly, quarterly, fee only, more than one of these?)
  8. Bill in advanced or arrears
  9. Billing cycle month (more than one of these?)
  10. Billing calculation based on end of quarter value or daily average balance? (more than one of these?


  1. Will Portfolio Management system accounts be linked to the CRM at the account level, portfolio level, household level?
  2. Will accounts be linked using Custodial feed or Portfolio Management system feed
  3. Consider integration, data flow for the following outside systems:
    1. Financial Planning Tool
    2. Trading/Modeling/Rebalancing Tool
    3. Outside Aggregation Tool
    4. Investment Research/Analytics
    5. Client Portal
    6. 401(K) tool


  1. # of admin users
  2. Will Enterprise level org need to be built?
  3. Definition of permissions & hierarchy for each user/role
  4. 3rd party access
    A. TAMP
    B. 3rd party managers
    C. CPA’s, Attorney’s, Estate Planners, outsourced roles

Client Portal

  1. Do you want your client portal to first show:
    – The financial plan and Net Worth statement
    – Account performance and investment transaction statements
  2. Features of the portal you will drive clients to use:
  • Outside asset aggregation – accounts linked by client
  • Aggregate asset viewing & reporting (managed assets, outside assets, liabilities)
  • Document Vault
  • Client initiated reporting – Performance
  • Client initiated reporting – Net Worth
  • Income, Savings, Expenses
  • Scheduling calls/meeting with your firm
  • Goals
  • View financial plan
  • Login to financial planning tool
  • Risk tolerance questionnaire
  • Client profile questionnaire

If you seek help, don’t hesitate to click HERE to schedule a one-time Boost Call or HERE to inquire into our lean, business operations strategy services.

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