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Holistic WealthTech Integration: Capturing the Full Power of Data

Jed Maczuba, September 10, 2020

A computer monitor with pages of information at left and right and an arrow moving across the illustration.

Data is the lifeblood of the wealth management business.

It guides decision making at all levels of the financial advisory process: from prospecting, to planning and research, to trade modeling and execution, to servicing and support. Yet despite the importance of data, many financial advisors struggle with integrating data-based decision making into their advisory practice.

As Rich Napolitano, CEO, and Darren Tedesco, President, discussed in previous blogs, Advisor360° provides a truly holistic platform—from the user experience to the underlying data and processes that support it. But how does this really work?

Rather than solving the problem through an overlay technological solution that connects an amalgamation of separate and unique platforms “after the fact,” our platform is constructed using a unified data platform at its foundation. Advisors, broker-dealers/roll-up RIAs, and investors all share a common and connected view of the entire book of business.

This is what most software companies strive for, but rarely achieve.

Advisor360°: wrangling data
Mastering data is tough.

McKinsey & Company conducted a survey of thousands of executives about how their companies use and organize data for artificial intelligence and advanced analytics. The result? Only 8% of firms engage in core practices that support widespread adoption.

The implications are significant. Organizations are falling short of capturing the full value of data. If organizations can’t get this right, it’s not difficult to see who suffers: the advisors and the investors they serve.

Prior to my current role as CTO of Advisor360°, I spent over 20 years consulting for financial services clients. Different technologies, disparate databases, data quality issues, vast data volumes, organizational silos, and competing priorities all pose significant challenges to progress.

Challenges with data is the norm for most companies—and there isn’t an easy solution. From my own experience, it’s hardly a stretch to see that while firms have a positive feeling about data, the reality paints a very different picture.

Vast opportunities are being missed.

Advisor360°: data as a strategic asset
Why do firms continue to try to solve this enigma? Done right, data provides advisors tremendous value in creating customized, individual experiences for their clients. We see data as a tremendous value-creation tool for Advisor360° users, including:

  • Product Enablement—Embedded within the toolset, integrated data can empower advisors to easily slice-and-dice information into consumable formats. Armed with this data, advisors can have meaningful conversations—not account by account, but in totality—across the investor’s entire household.

    Advisors can move seamlessly from prospecting, to account opening, to portfolio planning and ongoing servicing without having to leave a single tool. Data is delivered not only as traditional “business intelligence” reports but also as a core capability of the platform itself; It’s built directly into the product like we’ve come to expect with many of the apps we use in our personal lives.

  • Practice Management—Predictive analytics can guide decision makers on how to best run an advisor/broker-dealer book of business. Recommendations and guidance are based on data both within his/her domain, as well as within the platform ecosystem. Everything from predicting potential churn, to managing risk and regulatory compliance, to reducing the manual burden of operational activities—all of these become possible with high quality, connected data.

Advisor360°’s Unified Data Fabric™: householding
The heart of the solution is seamless aggregation of data across all types of data, across all sleeves of functionality. This approach ensures data is easily consumable so advisors can provide deep meaningful insight to their clients when it matters most. Advisor360° provides this.

The heart of the solution is seamless aggregation of data across all types of data, across all sleeves of functionality. This approach ensures data is easily consumable so advisors can provide deep meaningful insight to their clients when it matters most. Advisor360° provides this.

UDF-08-08

The Advisor360° approach to this data synchronization is our Unified Data Fabric™.

As its name implies, it is the base data foundation upon which our platform is built. Regardless of how the data originates (from the hundreds of external data feeds that we ingest daily, to real-time integrations with third-party partners, or to the data generated by the platform itself), all data in the Advisor360° platform is unified, cleansed, and structured for how our clients need it. Our dedicated group of data operations professionals ensure only the highest quality data makes it into our platform.

This is what most software companies strive for, but rarely achieve.

Householding as a central construct. Fundamentally, Advisor360° and the Unified Data Fabric™ are built around the concept of a household: a “household-centric platform.” Householding refers to a group of accounts connected through a family relationship. It could be a single generation or multi-generational. The investor, his/her spouse, and their kids could be one household. If it’s multi-generational, parents’ accounts could also be included.

The point of householding is to bring a broader perspective into wealth management by looking at this larger entity a more holistic way and from every possible angle, so that goals are achieved, and decisions are made more accurately.

The advantage of our solution is that householding is native within the Advisor360° platform. We don’t treat individual investors separately within the platform and then connect them through a thin veneer. Even in 2020, many firms struggle with this disjointedness. We solved this a long time ago.

Householding supports the natural work behavior of advisors and broker-dealers. Across the industry, most advisor technology is fragmented across the advisory process and involves discrete activities. For example, an advisor may use one system for goal planning, then print out a report or export the data into their asset management system to perform trades, and then another for generating consolidated client statements.

A fragmented model becomes more complicated when dealing with clients as they experience life events, clients that have diverse types of accounts, or with complicated tax situations.

Since most technologies don’t provide a unified solution available that can cleanly aggregate data, advisors spend more time on the technology than with their clients. This isn’t the case with Advisor360°.

Householding in Advisor360° is not built on top of disconnected solutions. It does not attempt to solve the problem by linking together accounts after the fact.

Householding technology as an enabler is ready for scale. It’s not a pipe dream.

The end game: deeper client relationships
Advisors are responsible for more than just executing trades on behalf of their clients. They help them navigate the complex and complicated world of financial products. They use their knowledge and expertise to construct personalized financial plans that aim to offer customized, goal-based, and holistic advice to drive precise outcomes.

Advisor360°’s platform and the data fabric upon which it is built was first envisioned 20 years ago as a household-centric platform which permeates and crosses all software sleeves. While many firms tout their investments in data, in reality, their efforts are not returning the promise.

Now is the opportunity to spend less time stitching together disparate systems and processes and more time bringing value to the table.

In today’s turbulent time, there is no better way to build long-lasting and meaningful relationships.

Jed Maczuba is Senior Vice President, Chief Technology Officer at Advisor360°, overseeing global technology to ensure our long-term mission, vision, and objectives align with the technologies of our business partners and clients.