Management Case Study: Fintech Start-Up and Rebalancing Analysis

This case study examines the emergence of a Fintech start-up, focusing on the concept of "rebalancing" in portfolio management. Rebalancing, the process of adjusting client holdings to align with target asset allocations, presented an opportunity for innovation. Sheryl Rowling, a manager, identified the need for automated rebalancing software to streamline the process and minimize taxes for clients. This led to the development of Total Rebalance Expert (TRX). The case highlights the rising trend of start-ups by middle-aged professionals, often self-funded to maintain ownership control. The increasing competition in the advisory field reflects a growing market and demand for automation in financial services. The analysis covers the opportunity, entrepreneurial traits, and the growth of the second-largest demographic for business start-ups, emphasizing factors like the increasing flow of money and the demand for financial management services. References to relevant academic sources support the analysis.

1
Management

2
Seeds of a Fintech Start-Up Sometimes Come from the Trenches
Q. What exactly is “rebalancing” and why was there an opportunity here? And what does this
case illustrate about the second largest demographic for business start-ups? Why might this
be so?
On acknowledging the entire case provided the concept of rebalancing that has been built up,
conveys that tis an act of adjusting the holdings of the clients which presents the current
holdings in concern to the target of stocks, bonds and cash assembled to meet his goals. This
is known as rebalancing. Sheryl Rowling, was one of the managers who had faced this issue
of rebalancing her client’s portfolio which brought in the urge of creating a software which
could help n automatic rebalancing. Rowling also stated that the rebalancing could actually
help in saving the taxes of the clients which could fetch more and more clients to the
company (Schanzenbach and Sitkoff, 2016). Adjustment of the portfolio as per the
requirement of the client and the consideration of the number of other factors which could
actually take on the high taxes, demands rebalancing and this act of adjustment could be
beneficial for both the client and the company. This has brought in the opportunity for Sheryl
to share on her software named Total Rebalance Expert (TRX) which could automatically
rebalance the portfolios and thus this could be productive for Sheryl, client and the company
using the software (Dimmocket al. 2015). The people has been focusing and opting for
planning in their lives which brought in the management of their finances and this brought in
the opportunity for the rebalancing software to emerge up and be popular.
The second largest demographic for business start-ups has been observed through the market
hat Sheryl and Mr Lyon has been receiving for his product or software of rebalancing. This
has conveyed that the start-up demographic has been rising and the demand has been adding
on for the automation of the rebalancing act. The intense competition in the advisory field has
been reflected through the sales growth that Mr Lyon has been enjoying that is 225 percent
per year since 2015 (Charter, 2017). His clients has been about 400 advisory firms and has
employed about 47 employees. These facts reveals the increasing competition or the
increasing demographics of the start-up businesses which are creating more and more scope
for business (Sawanget al. 2016). The increasing population has been one of the causes of
the increasing competition and the increased flow of money has also been the reason of the
same. The flow of money has increased quite heavily which has brought in the urge of the
people to expand their living and thus, the idea of business has been popping up. The

3
management of the finances has been the output of the same and thus, it could be said that the
cycle of business or economy has been the reason for the increased competition.

4
References
Charter, M. (2017). Greener marketing: A responsible approach to business. Abingdon, UK:
Routledge.
Dimmock, S. G., Gerken, W. C., &Grahm, N. P. (2015). Is fraud contagious? career networks
and fraud by financial advisers. Career Networks and Fraud by Financial Advisors.
45-60.
Sawang, S., Parker, R., & Hine, D. (2016). How small business advisory program delivery
methods (collective learning, tailored, and practice‐based approaches) affect learning
and innovation. Journal of Small Business Management, 54(1), 244-261.
Schanzenbach, M. M., &Sitkoff, R. H. (2016). Financial Advisers Can't Overlook the Prudent
Investor Rule. Journal of Financial Planning, 16-14.