Are wealth management platforms worth the hype?

All-in-one platforms can help you drive better client experiences, increase revenues, and reduce costs

This technology project is going to change everything! Through deep integration, we can create an amazing client experience, increase our Net Promoter Score (NPS), gain new revenue, and cut costs. The project has a positive rate of return—it’s really a no-brainer!

As a technology decision-maker of a wealth management firm, how many times have you heard someone say this?

Who in the financial or insurance industries (or any industry for that matter) presenting to stakeholders or in a sales meeting to a prospect talking about “integration” has heard this?

Has this technology vision ever really been achieved?

Systems integration: easier said than done

For a long time, wealth management firms have struggled with taking their core transactional platform (such as the clearing firm’s processing system, their own self-clearing platform, or a portfolio accounting engine) and integrating that “core” system with ALL the other systems required to run a wealth management enterprise. This includes books and records, compliance, commission management, advisor desktop, SMA/UMA model marketplace, enterprise workflow, document imaging, and the list seems to get bigger every year.

This technology struggle was and still is: how do you make all the systems work together?

Over the course of my career, I have been both a user and a provider of wealth management technology. I used to think the ability to “single sign-on” (SSO) from the core system onto another system was “integration.” Integration was supposed to be the Holy Grail.

But I soon learned that to achieve true integration there needed to be contextual passing of data from one system to another through a single sign-on connection. This created efficiencies in the workflow, reduced errors, and generally made the most sense.

Why integration isn’t always integrated

Over time, as I continue to see more wealth management technology projects fail to reach their full potential, I keep coming back to the integration and how it never seems good enough.

We would spend a lot of time and money developing the ability to pass a few data elements over from one system to another, feeling proud of our ourselves, and then inevitably the client would ask, “Why can’t you pass everything? This still does not really do much for me, I want it all!” The engineers would laugh and tell me, “Rich, we can do anything: how much time and money do you have? But you must first prioritize what data elements you want. We can’t just send them everything.” We would then prioritize the data elements to pass over, gain buy-in from the client, and continue the journey.

Then something would be changed.

An integration partner would change a screen or a data field, or even worse, entirely alter the user interface without us knowing, causing nothing to work as it was meant to—and certainly not the definition of true integration. I would bang my head against the wall and say: there must be a better way.

Come to find out there is a better way…and it’s pretty simple in hindsight!...

Building a better wealth management platform

For a WealthTech/FinTech firm to do software right, first start with the data and build a household client-centric data model. Next, build the core systems that a wealth management firm needs to run the day-to-day business. And then integrate with the best third-party partners that complement your core. You’ll see the productivity magic that occurs.

Here at Advisor360°®, we believe we have solved the integration and single sign-on challenges that have plagued wealth management firms. We have built portfolio accounting, compliance tools, an advisor desktop, account opening/maintenance/operational processing tools, performance reporting, trading/models, an investor portal, CRM, enterprise workflow, document storage, and mobile—to all sit within your client-centric household data model.

Vendors changing data elements or the user interfaces leads to business disruption. These can be efficiency-blockers of your past. We help enterprises make all those integration problems go away because all the product components and associated workflows required to be efficient and productive are now all under one “roof” (a.k.a. the all-in-one platform).

The one thing they’re missing
I have been in the financial services business for over 30 years, and I think that with the benefit of hindsight, everyone would have started like Advisor360° did. Yet, the financial services industry is saddled with legacy account-centric platforms that are too cumbersome to replace and too hard to contemplate ever leaving, as there really was no good alternative in the marketplace.

Everyone has tried (the custodians, the clearing firms, other SaaS technology providers), and they all lack one thing: the Unified Data Fabric™ that weaves together everything. (They did not start with the end in mind; they built over time).

Five benefits of an integrated wealth management platform

If you are a Chief Compliance Officer, Chief Operations Officer, Chief Financial Officer, and/or the Head of Advisor recruiting, the benefits of the all-in-one platform are enormous:

1.Supervision. 
By aggregating all the assets and all the relevant systems that leverage the same data under one roof, there is only one place you need to go to supervise. Further, branch audits in post-COVID times are streamlined, since much of the audit can happen via that centralized system of record.
 
2.Operational Processing. 
Having dashboards at your fingertips lets you see how your staff is doing and where the bottlenecks are. Operational metrics can show where you have high rates of straight-through processing (STP) and where additional opportunities are for greater efficiency. NIGO rates are easily tracked, showing training and performance opportunities.
 
3.Recruiting. 
Showing an advisor how easy it is to run their practice with everything in one unified system generally makes a recruiter’s life easier, enabling the firm to grow—and retain—top advisors.
 
4.Cost and Scale Efficiencies. 
Creating scale is the lifeblood of any wealth management firm, and by reducing the number of vendor partners you are using, it gets easier to manage and results in cost synergies.
 
5.Productivity. 
We are all asked to do more with less, and the “all-in-one system” creates significant productivity for your field force, so that they can either sell more or better service clients.

The benefits and payback of the “all-in-one” platform are real. It is never easy changing enterprise systems, but once you have made the switch, the payoff is more than worth it. I used to have a boss who would say, “Rich, if it was easy, everyone would be doing it!” He was so right, because what we have done has not been easy. In fact, Advisor360°’s platform has been 20 years in the making.

Digital transformation: it’s all about productivity

Never in my career has it been so clear to me that the “all-in-one” wealth management platform is the only way to get to digital transformation. If you are in the wealth management business, we can help you: (1) deliver significant productivity benefits to your advisors and (2) achieve true efficiency gains for your back office. If this resonates with you, feel free to reach out to us.

Change is not easy. But we believe the benefits of the “all-in-one platform” will enable enterprise firms to achieve their digital transformation goals.

Richard N. Hart III is Senior Vice President, Head of Product Client Experience at Advisor360°, responsible for product development of the Advisor360° platform and ensuring our clients have a great experience using our technology.