For this issue of TWMTT, we talked to Djaffer Maloufi, Senior Product Manager, Croesus, and asked him to share his view on why, in today’s market, investment managers and firms need access to better portfolio rebalancing tools. He also outlines how these products will evolve going forward, to include more flexibility and comprehensive features, making life even easier for the wealth management professionals.

Nice to meet you. Can you first perhaps tell us (and our readers) a bit about yourself, and your career to date?

I started my career in financial services as an Actuarial Analyst at an Insurance-focused consulting firm. Eager to expand my horizons, I transitioned into product development within the P&C insurance realm, where I developed expertise for product lifecycle management and market analysis.

Driven by a passion for innovation and growth, I ventured into asset and wealth management, joining a leading Canadian investment fund manager as a product manager, I took on a pivotal role in shaping the development, management, and marketing of investment solutions products. 

18 years later, my multifaceted background and dedication to excellence have positioned me as a seasoned product leader poised to drive impactful change and innovation within the wealth management landscape.

Where are you based? 

I am based in Montreal, but I have global responsibility for our portfolio rebalancing products for across both the European and North American markets.

What’s your main focus in your current role?

My main focus is setting the product vision and strategy for portfolio rebalancing solutions, and identifying growth opportunities across the European and North American markets.

In plain speak, what is a portfolio rebalancing tool? Why would a firm / advisor need one?

A portfolio rebalancing tool is like a personal analyst for investment managers. It automatically analyses investment holdings and suggests adjustments to keep portfolios in line with investor objectives. It's essential for firms and advisers because it saves time, facilitates cash management, ensures investment compliance, optimises portfolio modifications taking into account the fiscal implications and the investor's personal requirements. Overall, it's a crucial tool for effective portfolio managers, helping to maintain desired asset allocations and manage risks effectively.

What are the issues the marketplace has around rebalancing? How have these issues arisen? How do clients describe their problems in this area?

The marketplace faces several challenges regarding portfolio rebalancing within portfolio management solutions (PMS). While these solutions may provide basic rebalancing features, they often lack support for critical functionalities such as modelling, currency hedging, rebalancing at scale, managing alternative assets, and accommodating custom portfolio restrictions and preferences such as tax-efficient portfolio management.

As a result, portfolio managers find themselves grappling with manual, Excel-driven processes that hinder efficiency and scalability. They seek solutions that offer human-driven automation, empowering them to streamline rebalancing processes and focus on value-added actions for their clients.

What are the easy wins when it comes to improving the portfolio management process?

Easy wins in improving the portfolio management process involve leveraging the advantages of automated portfolio rebalancing tools. These tools streamline day-to-day for portfolio managers by analysing investment holdings and suggesting adjustments to align with investor objectives. They significantly enhance efficiency for financial advisors, offering high levels of customisation and flexibility. Advisors can choose between fully automated, semi-automated, or manual modes, enabling simultaneous rebalancing of multiple portfolios, accounts, relationships, and even conducting tactical rebalancing focused on specific models and asset classes. Overall, these tools provide quick and effective solutions for streamlined portfolio management processes.

How do you see the marketplace for portfolio rebalancing solutions developing? Has there been much change to this type of solution in recent years?

As technology continues to advance, we can expect more exciting developments in portfolio rebalancing software. Recent years have seen significant changes, with a focus on integrating Artificial Intelligence (AI), Machine Learning (ML), and Operations Research (OR). Some future trends and innovations include dynamic asset allocation using ML/OR models to analyse real-time market conditions and economic indicators, predictive analytics to make informed investment decisions, and AI-driven automation of regulatory compliance checks. These developments promise more efficient and sophisticated tools for investment management.

To foster a culture of innovation and drive research initiatives, we established Croesus Lab six years ago, an initiative aimed at encouraging technological advancements within the company. Croesus Lab is our innovation accelerator, an internal applied research centre dedicated to pioneering the future. Our research and experimentation teams explore emerging technologies that will profoundly impact our product and service offerings. Our teams are engaged in projects related to artificial intelligence, operations research, cybersecurity, quantum computing and several other cutting-edge technologies.

So, for those who don’t know who Croesus is, can you tell us who you are, what you do, and how you are different?Croesus is a

Canadian WealthTech with over 35 years of success, whose values are fully aligned with the Swiss wealth management industry. Our portfolio management and rebalancing solutions are already in use by over 15,000 daily users, who collectively manage over 1 trillion CHF in assets.

What sets us apart is our commitment to innovation, customer satisfaction and industry expertise. We continually strive to deliver best-in-class functionality, leveraging advanced technologies such as artificial intelligence, machine learning and operations research to enhance our offerings. In addition, our team is made up of professionals with extensive experience in the financial services industry, ensuring that our solutions are not only advanced, but also tailored to meet the specific needs and challenges our customers face.

How and why is Croesus Central different from others? What makes it unique?

The solution offers exceptional customisation, advanced modelling, scalability, pre-trade compliance management and cash management, other specific features are also available for European Markets such currency exposure and hedging, optimisation of tax implications and tactical rebalancing, providing financial advisors, and wealth managers with the flexibility they need to adapt to their workflow seamlessly. 

The solution is also designed to integrate easily into wealth management ecosystems without the need for adjustments. As a cloud-based solution, it is designed for discretionary portfolio managers working in private banks or investment firms. It is characterised by its customisation capabilities and integration with each client's portfolio management systems.

What type of clients do you tend to work with? Why are they typically looking for a portfolio management solution?

We primarily work with private banks and the wealth management divisions of large international banks to help them enhance and simplify their complete discretionary portfolio management process. These clients typically seek portfolio management solutions due to recurring problems in portfolio rebalancing. These issues include wasting time, loss of productivity, risk of errors, sub-optimal optimisation, difficulty scaling without additional resources, and sub-optimal transaction costs. Croesus Central addresses these challenges, providing an efficient and automated solution for portfolio rebalancing, thereby meeting the needs of our target clients.

The banks’ clients also benefit from the solution through the quality and personalisation with which the bank manages their assets. A win-win.

If you would like to take part in our 'TWM talks too’ series, please get in touch with us at office@thewealthmosaic.com

Croesus Central – Portfolio Rebalancing Tool:

• Croesus offers innovative wealth management solutions that simplify wealth management
• With talent made up of over 200 people in Montreal, Toronto and Geneva, the company markets solutions focused on the needs of the wealth management sector.
• These solutions enable wealth professionals to increase productivity, improve client relationships, make informed decisions, and simplify how they manage assets under management.
• Croesus fosters human wealth and is an employer of choice, having won “Best Employer” awards many times by putting talent at the heart of its values and business decisions.

Discover more about Croesus Central here.