RedBlack's Peter Giza gives RIABiz a look under the hood of its Rebalance Express software

New Hampshire-based software maker competes with a lower price and an easy-to-use interface

Monday 9.6.10 by Heather Underwood

Brooke’s Note: Heather really stepped into the line of fire when she agreed to review the rebalancing softwares of Tamarac, iRebal and RedBlack in quick succession. These are fierce competitors in a small nascent niche and each one undoubtedly has some advantage over the others. In a way, this RedBlack review is most interesting; because it is the third that Heather did, she was able to more fully survey the landscape of providers of rebalancing software. What’s clear is that iRebal is the most established; Tamarac has the most customers and integration and RedBlack is the least expensive. It’s also clear that all three solutions are making at least some customers happy. The devil is in the details and that’s why it’s worth reading this review — and those of iRebal’s and Tamarac’s products [links below] as well if you haven’t already.

Release Date RedBlack was founded in 2006 and made its first pre-production release Q1 2007
User Base 30+ firms with AUM ranging from $20 million to $1.25 billion
Main Competitors iRebal, Tamarac
Web or Desktop RedBlack can be accessed via a desktop application or through a cloud based application. RedBlack’s “web” version does not run in a browser, but rather is run in a virtual desktop environment
What does it do? RedBlack is a portfolio monitoring, rebalancing and trading software application with a wide array of feature modules including trade reports, compliance, etc.

RedBlack, based in Bedford, N.H., entered the rebalancing technology market in 2006 to challenge two established companies: iRebal and Tamarac.

RedBlack came onto the scene ready to “break out of the mold that the industry has tried to cast for its vendors,” says Peter Giza, chief of technology at RedBlack. It handles the rebalancing needs of clients from $20 million to more than $1 billion AUM, but the company aims to have substantially lower pricing and faster setup and implementation time than its competitors.

Competition in the nascent market of rebalancing software is intense. Not many RIAs have migrated to rebalancing software in general, so the three companies are fighting to establish themselves in a new industry. iRebal is the standard, but Tamarac has made big strides to make its software competitive and has the most customers. See: Tech Review: iRebal thrives after TD Ameritrade acquisition

RedBlack is mainly taking on Tamarac with a pitch that it provides almost everything that the more established players do, but at less cost and less training time. In an industry where many software products take days of training time, RedBlack says it sets up clients in about two hours.

RIABiz [Nevin, Brooke and I] took a look, and we had these observations:

The usability of the product is very apparent. Roel Vlemmings, RedBlack’s chief architect, has taken his Windows UI development background and constructed a very navigable, intuitive product.

A big differentiator in terms of usability between RedBlack and iRebal are each system’s use of conventions. RedBlack makes the user feel familiar with the software by just looking at it. iRebal expects the user to learn its system’s indicators, layout, and navigation from scratch.

RedBlack’s differentiates itself from Tamarac by focusing strictly on rebalancing. Tamarac has an all-in-one suite of products, which may appeal to firms seeking such integration. See: A close look at Tamarac’s Advisor 9 and its strategic use of Schwab software

RedBlack’s Rebalance Express is a functional, cost-effective, user-friendly piece of software, but advisors considering the product should be willing to work with RedBlack to develop any customized functionality until the product becomes more established and robust.


Giza estimates that RedBlack with all features “turned on” would cost $8,000-$9,000 per $100 million AUM.

AUM Range RedBlack Price Range
$25-50M $6,000 – $7,000
$100-150M $8,000 – $9,000
$500-550M $22,000 – $24,000
$1000M $39,000 – $44,500

Giza attributes RedBlack’s 300% growth rate over the last 8-10 months — RedBlack now has just over 30 firms as clients — to its flexibility and lack of esoteric features.

Giza says RedBlack’s software sacrifices only a few infrequently used features. In exchange, advisory firms get a much lower price than competitors’ packages. He identifies the firm’s major competitor as Tamarac, which has lately been challenging the sector’s leader, iRebal. “We provide probably 90% of what the industry needs,” says Giza, “and we are taking away clients from existing competitors [primarily from Tamarac.]”

Tamarac takes issue with Giza’s characterization.

“Anything that you can start using in two hours is going to be extremely basic – and from what we’ve heard from our clients that tried RedBlack prior to coming onboard with us, that is the case,” says Matt Stroh, vice president of marketing for Tamarac.

Stroh adds that “to-date, Tamarac has never lost a client to RedBlack.”

There are functionalities that RedBlack does not currently offer, two of which are asset class tolerance bands and trade approval hierarchies. I’m not sure what percentage of industry functionality this equates to, so I’ll save readers my “guesstimate.” RedBlack is in the process of developing these features, according to Giza.

A RedBlack Client’s View

Morgan White, Managing Director for Osborne Partners Capital Management, LLC., started using RedBlack last summer. With approximately $1 billion in AUM the firm is currently reviewing the software for overall implementation; Osborne is one of RedBlack’s largest clients.

“When you talk to people who have looked at it but aren’t using it, you don’t get a good picture of what it’s about or how willing RedBlack is to work with people to address their specific needs,” says White.

In 2004/2005 Osborne Partners Capital Management, LLC., was managing roughly $500-600 million and evaluated two other companies with rebalancing solutions, both were prohibitively expensive. Osborne Partners Capital Management, LLC. at the time was using a custom rebalancing system that used complex spreadsheets, manual rebalancing procedures, and data import/export.

“To rebalance 110 accounts it took two of us the better part of a day. With RedBlack I can do it in five minutes; my portfolio assistant can do it in five minutes,” says White.

Building up RedBlack for Big Firms

White and his team have been working with RedBlack to adapt the software to fit their firm’s specific needs. “We’re not quite there yet, but we’re very close. [RedBlack] handles the equity side perfectly; where we’re having challenges is addressing the fixed income side,” he adds.

“They’ve been pretty liberal with us because I’ve been very helpful to them and given them a lot of thought and time about the logic of how you go through a rebalancing,” says White, speaking to the variations on standard training and setup his firm has undergone.

RedBlack is using client input to drive development, much as its competitors have done over the years.

Modular Approach

“We’ve been desperate to not pigeonhole RIAs into a situation where they cannot afford us or can’t use us; that was one of the reasons for being modular,” says Giza.

Modules can be turned on or off to accommodate firm requirements and include reporting tools, asset class models, models of models, multi-firm support, and adapters for a range of systems and custodians including Orion, PortfolioCenter, Black Diamond, Advent, TD, Fidelity, Schwab and Pershing. Modules are added by RedBlack, not by the client directly.

Adding an adapter (i.e. an integration capability with a custodian or other platform) usually takes RedBlack a week to implement and push out to the client.

Where is your RedBlack?

RedBlack can be run locally as a desktop application or in the cloud as a virtual desktop application.

RedBlack is not web-based as there is no browser through which a client can access the application. Being “cloud-based” means a client’s data and applications are stored on a remote server, which a client can log into to access his/her virtual desktop environment. This means no on-site maintenance or hosting are required and advisors can access it from anywhere.

Clients can ‘have portfolio management systems and CRMs added to the virtual environment in addition to the RedBlack software, giving advisors one virtual environment with all the products they need.

“We sell these platforms either bare bones or completely loaded up with every standard Microsoft application that people would want to have,” says Giza.

RedBlack is not an example of the SaaS model used by Tamarac, which runs directly in a web browser.

User Interface

RedBlack’s Rebalance Express immediately seems straightforward to use and is visually appealing without being overwhelming.

RedBlack's dashboard is customizable, aesthetically appealing, and gives advisors an overview of their firm's activities
RedBlack’s dashboard is customizable, aesthetically appealing,
and gives advisors an overview of
their firm’s activities

RedBlack employs a sidebar navigation system with icon indicators and text. The main part of the screen is organized into modules on the home screen and spreadsheet style layouts for account and household views.

Views are customizable via a slick drag-and-drop interface for arranging modules, columns, views, etc. and aside from some cell highlighting, color-coding, and easily-visible legends used for indications and alerts, the interface is clean and minimalistic.

Account View

The account view allows advisors to click through top-navigation tabs to work with positions, balances, rebalancing, restrictions, equivalents, transactions and orders.

Account view: Conventional navigation, spreadsheet style layouts, intuitive indicators
Account view: Conventional navigation, spreadsheet style
layouts, intuitive indicators

From the rebalancing tab advisors can assign specific actions — close position, adjust position to %, etc. — for single securities within an account.

The “other details” tab provides basic CRM information based on portfolio management system data. In the next RedBlack release, advisors will be able to pull this data from Orion Advisor Services LLC of Omaha, Neb. and other platforms with CRM systems.

Eric Clarke, president of Orion, says he is pleased with how RedBlack has worked with his customers thus far.

“The advisors who are using that integration [between Orion and RedBlack] are pleased with it,” he says. “They seem to have a good idea of what advisors are looking for and they seem to be priced pretty inexpensively.”

Household View

Advisors can view groups of accounts with tax ID affinity using RedBlack’s household view. It is similar to the account view except it has an overview of the accounts contained within the household.

Giza stated that RedBlack is working toward the “nirvana” of rebalancing families of accounts. A family of accounts combines multiple
households and individual accounts, each assigned its own model, which can be rebalanced at the press of a button.

One of the key reasons RedBlack uses traditional desktop technologies for its software is because of the functionality contained in the household view. “It’s a very busy environment,” says Giza as he showed us the collapsible columns, manual rebalancing tools, “hot keys”, and reset capabilities. “You can’t do that efficiently in a browser.”

Pros & Cons

  • Although no RedBlack client to date has needed more training than the free two-hour training that comes with the software trial, additional online training is priced at $100 per hour. On-site training comes with a minimum three-day commitment and costs a daily amount plus travel costs. Continued remediation and support are included in the cost of license.
  • RedBlack does not currently have a primary and secondary hierarchy structure for trade approvals like the one implemented by iRebal, but Giza assured me that it is “on the release train.”
  • RedBlack has the ability to hook advisors up to a FIX network using FIX Flyer to take advantage of real time data if the portfolio management system provides this functionality. Advisors can get setup with FIX Flyer at a reduced cost through RedBlack.

Looking Ahead

RedBlack wants to provide a scalable solution for advisors and is working with clients to get it there. It has managed to provide enough functionality to handle the rebalancing needs of clients like White without sacrificing usability. The future challenge will be remaining the “value solution” while meeting a broader range of functionality needs.

Story was adjusted Sept. 7 to more accurately reflect how RedBlack is working on giving advisors the ability to rebalance families of accounts.

Eric Clarke | Peter Giza | Morgan White

Technology | iRebal | Tamarac | RedBlack | Orion