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18 November 2020

Scaling Portfolio Customization with Portfolio Optimization

As technology advances and the pressure to operate more efficiently mounts, investment managers continue to search for solutions to maximize time spent managing thousands of portfolios across their book of business. When firms expand and scale, they focus on ways to optimize the portfolio management process.

Portfolio optimization is a popular process dating back to Modern Portfolio Theory (MPT) in the 1950s, where investors began to appreciate the power of portfolio diversification and continued with the introduction and rise of quant funds in the late 1980s. The methodology is evolving today with the explosion in robo-advisor services that leverage portfolio optimization to facilitate the automation of tens of thousands of retail clients. Employing these various portfolio management techniques have helped managers and funds alike to utilize automated models to optimize and manage their portfolios.

With that said, other optimization approaches need to be addressed.

Many of SS&C Advent’s clients are responsible for managing private client wealth. Often these managers are confronted with the challenges of managing portfolio allocation targets, while simultaneously accountable for each relationship. Other key responsibilities include accounting for target drift, adhering to client restrictions, and sensitivity to a client’s tax goals. Considering these factors at scale across a book of business with more than a thousand accounts and households, the value of optimization logic to account for these factors becomes imperative for a practice to operate efficiently. Even further, the value of a stable and cloud-based solution accessible from anywhere becomes increasingly apparent.

Leveraging Advent Genesis, common scenarios that the optimizer can help streamline include:

  • Eliminate manual substitution activities. Perhaps a manager wants to buy a specific stock for a group of clients but one of the clients is an executive at the company and the shares cannot be purchased without proper disclosure. Developing an equivalent list of securities to allow the system to automatically substitute restricted securities with the securities on your equivalent list creates significant time savings, especially when accessing thousands of portfolios at once.

  • Quickly distinguish between actual drift and “noise”. “Noise” in this situation might be seeing variation in portfolio holdings only to find out that that portfolio requires that the holding not be sold because of a low cost basis.

  • Automate selling investments to align the portfolio’s tax goals without sacrificing the portfolio manager’s strategy. If attempting to sell a security out of a client’s portfolio when the client has both a taxable and non-taxable account, optimization leverages a solution that would sell the security from the nontaxable account assuming both accounts held that security.


With Advent Genesis, optimization and customization are the foundation in streamlining portfolio construction. With a highly scalable and cloud-based solution, Portfolio Managers and firms alike can realize greater value in time efficiencies and data accuracy, ultimately increasing value to their clients.

To learn more about the Advent Investment Suite of solutions, or to request a complimentary Genesis demo, contact us.