popular as businesses strive to meet consumer expectations for unique and tailored experiences. Wealth managers are not immune from this trend – indeed, 55% of firms’ relationship managers say demand for personalized services and engagement is increasing.2 In the age of personalization, aligning portfolios only to risk tolerance will not be sufficient. Clients will demand that their investments align also to their values, personal goals, and other unique preferences. Technology has made this possible, providing advisors the scaffolding to manage a core set of model strategies with the flexibility and guardrails to customize portfolios for each client.

Clients can benefit significantly from managing investment portfolios holistically across their household rather than at an account level. By rebalancing portfolios at the household-level, advisors can ensure that all accounts are working together to meet the household’s financial goals while maintaining a portfolio in totality that aligns with the client’s risk tolerance. Household-level rebalancing enables several tax-efficiency strategies, for example selling loss-holding assets in taxable accounts to offset gains, and by locating growth-oriented assets in tax-free accounts to ensure future gains are tax free.