Household rebalancing trade lists that follow the advisor's rules

Situation

The advisor rebalanced each client household by hand every quarter. The work meant gathering the accounts, working out the trades in a spreadsheet and entering them at the custodians. Employer plans such as 401(k)s count toward the household's mix but cannot be traded.

Solution

A program takes the target model, the household's holdings across all of its accounts and the composition of any blended funds. Target-date and balanced funds are therefore counted by what they hold. The program returns a whole-share trade list that brings the household back toward its target and follows the advisor's rules.

• Whole shares only, with capital gains kept low.
• Positions under 0.5% of the portfolio cleared out.
• No sales of holdings the client keeps for personal reasons, and no trades inside employer plans.
• A minimum cash balance kept in each account.
• Tax-inefficient assets placed in tax-advantaged accounts.

Design decisions

For reliability and compliance, the same inputs must always produce the same trades, so the specification ruled out AI in the program. Each trade is chosen to reduce drift from the target at the lowest tax cost. Sells come before buys so the cash they free up is counted, and trades stay within each account because cash cannot move between accounts. The program places no trades, and the advisor reviews the list.

Outcome

The advisor can generate a trade list for any household with the advisor's rules already applied. Because the same inputs always give the same list, every trade can be explained and reviewed for compliance.