The benefits of account aggregation – How to choose the right tool for your firm

Posted by Lindsay Faussone, Vice President of Business Development on January 5, 2018

More and more independent financial advisors have started using account aggregation tools. Account aggregation software automatically gathers information from your clients’ accounts at different financial institutions and presents it along with custodied assets on a consolidated platform for easy client review and analysis.

The most comprehensive account aggregation tools collect a wide range of different types of client financial data and update the information as often as daily. This includes the balances in held-away investment accounts such as 401ks, balances in bank savings and checking accounts, balances for liabilities such as credit cards and home equity loans.

The benefits of account aggregation

Advisors realize a number of benefits by utilizing an account aggregation tool, including:

• A competitive advantage – Many clients today – especially younger clients– expect their financial advisors to offer sophisticated, technologically advanced tools like account aggregation. By demonstrating the capabilities of account aggregation during prospect meetings, for example, you may be able to boost your closing rates. Using an account aggregation tool can result in greater client satisfaction, which can lead to more referrals and increased assets under management for your firm.

• More comprehensive financial and investment advice – When you can easily access and view your clients’ overall financial picture, you can provide more holistic guidance and advice that’s targeted to their specific needs. In essence, you can better secure your place as the center of their wealth management team.

• Simplified operations – With account aggregation, you’ll no longer need to manually gather and key/enter disparate data into your financial planning, performance reporting and CRM systems. This can streamline processes within your firm and free up yourself and your staff to spend time on more productive tasks that add value for your clients.

• Faster new client uploading – You can enable your new clients to share their far-flung financial data with you right from the start, which provides you with faster and easier access to their information, again saving time and headaches. It also reduces the chances that some important financial data gets overlooked.

• Improved data access – You and your clients will have easy access to a comprehensive view of their financial data, not just the accounts for which you are advisor of record. This can lead to better decision-making with regard to clients’ investment portfolios.

• More control – The ability to monitor and manage held-away assets will give you greater insight into your clients’ overall finances, as well enable you to spot opportunities to provide additional services or products to support their needs. It will also allow you to be more proactive when it comes to offering advice.

Choosing account aggregation software

A number of different vendors offer account aggregation tools to independent financial advisors. What should you look for when choosing account aggregation software for your firm? Here are five factors to consider:

1. Breadth of institutions that can be accessed. There are thousands of different financial institutions where your customers could have accounts. Therefore, you want to make sure that any account aggregation tool you’re considering offers access to as many of them as possible. If a particular tool doesn’t offer access to an institution you need, ask if the institution can be added and, if so, how quickly.

2. Presentation of data to clients. The client portal is a critical component of any account aggregation tool, so pay close attention to how data is presented in the portal. It should be well-organized, categorized ,and easy to understand, while also displaying on-demand performance reports.

3. Data accuracy. Account aggregation software gathers data from a wide range of different sources that sometimes use different terminology. This opens the door to potential errors, so ask about the software’s error rate and whether it is able to run quality assurance analytics on data and algorithmically reconcile data to help ensure accuracy.

4. Ease of use. The greatest account aggregation tool in the world will offer little value if you and your clients don’t use it. Your account aggregation tool should be easy for you and your staff to get the software up and running and ready for client use. Further, the tool should include functionality to help you and your clients stay on top of the account linking process (e.g., alerts when passwords have expired and accounts are no longer linked).

5. Availability of add ons. Does your account aggregation tool provide the ability to include personal financial management widgets that allow clients to track spending, improve budgeting and monitor their progress toward their goals? These features can help clients engage more with the technology.

Should you add account aggregation to your business?

Account aggregation could help streamline your operations, boost client satisfaction, and increase your firm’s profitability. If you haven’t considered how your firm could benefit from using account aggregation software, now would be a good time to check it out.

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