Financial Advisor Marketing & Technology

Marketing & Technology For Independent Financial Advisors


Tell Vendors What You Think About Integration

Financial advisors for years have clamored for an all-in-one solution combining portfolio management, customer relationship management, and financial planning software into a single platform. Combining these three functions, which are essential to any advisory firm that wants to adhere to best industry practices, has been an elusive goal. Years ago, I branded the long-sought breakthrough application “The Silver Bullet,” evoking the legendary powers of the only weapon capable of killing a werewolf.

But the all-in-one application has proved elusive. So persnickety is the typical independent advisor (IA), he couldn’t work for anyone but himself. That’s why he chose to be an independent advisor. No single application incorporating portfolio management software (PMS), financial planning software (FPS), and customer relationship management (CRM) could ever be widely adopted. Uncompromising entrepreneurs don’t want a Veg-O-Matic—the kitchen appliance that sliced, diced, broiled, and boiled. A Swiss-Army-knife approach would be unacceptable.

Advisors want to choose each tool in their practice because they’re managing other people’s money. When your clients’ wealth is at risk, not to mention your livelihood and reputation, you understandably want the tools that work best for you. No wonder the typical advisor insists on individually picking his favorite PMS, CRM, and FPS applications. No wonder that advisors won’t settle for a CRM solution that’s “pretty good” even if it is integrated with a PMS system that’s great. You want things your way. You want technology tailored to you.

Getting that was basically impossible and the quest for the Silver Bullet didn’t get very far. Until now.

Web Services are now enabling advisor applications to talk with each other. These Web Services, which allow your PC to call data from a Web server—empower you to build your own Silver Bullet. If you purchase applications from vendors who are investing in Web Services, integration suddenly becomes easier. Your portfolio management application can feed data to your financial planning application. Your financial planning application can feed your website. And your website can feed your client relationship management software.

Just as the Veg-O-Matic gave way to blenders, juicers, and food processors, the one-size-fits-all Silver Bullet is giving way to new solutions using Web Services to create a new kind of Silver Bullet. eMoney Advisor, a financial planning application, uses a Web service to stream data from Cash Edge’s account aggregation application. Redtail Technology, a CRM system, uses a Web service to pull in contact data from Albridge Solutions. MoneyGuide Pro offers a Web service to pull in holdings data from BlackDiamond Reporting. The list could go on and on. Technology vendors of Web-based applications are typically able to build XML interfaces in 50 to 200 man-hours, which is not that big a commitment considering that it opens up each application to another’s user base.

For advisors, the Web Services provide significant improvement in efficiency and savings. They free advisory firms from re-keying client data into multiple applications, which saves labor and reduces errors. Service to clients is also improved because you no longer have to input all of the holdings every time you do analytics on a portfolio. If your analytics program, say Morningstar Principia, can take a Web Service from your portfolio accounting application or get it directly from your custodian, you are likely to run your analytics program more often.

A handful of technology vendors are leading the way by integrating with each other using Web Services. Please let me know which applications would you like to see integrated? Which integrations have been working well for you? Which have not worked well? Please comment. Vendors need to know what you’re thinking.

21 Responses to “Tell Vendors What You Think About Integration”

  1. July 25th, 2008 at 12:55 pm

    Bill Ramsay says:

    Excellent observations about the fractured nature of the advisory profession. When it comes to software, the Long Tail concept is a good visualization of why a silver bullet with broad appeal will never be developed by a single vendor, and therefore must involve data connectivity, with web services in some form likely being part of overall integration.

    In essence the nature of software vendors is to look for the broadest appeal, and therefore focus on the most widely requested features. This assures that they will ignore the majority of features (the x axis on the long tail graph).

    eMoney and CashEdge provides a good demonstration. Many advisors see account aggregation as a way to provide a snapshot of a client’s net worth- (What they have). For us, understanding what has caused net worth to change over time is just as important (Where they’ve been), so simple current account balance account aggregation has limited appeal to us. Ultimately we’d love to have transaction level accounting for every client account, as well as all their income and expenses. A definite long tail combination given that a large portion of the advisory profession does not want to deal with transaction level accounting, and only a portion of those that would are willing to bear the cost and effort it takes to retrieve and manage the data.

    Since we recognize that it’s likely we’ll always have some Long Tail issues that will prevent fully automated integration, we are constantly developing and refining systems to fill in the gaps for ourselves, though we also are happy to purchase parts from vendors whenever it gets us closer to automated integration at a reasonable cost.

    I think it’s important to recognize that all advisory firms have internal systems for integration; however in a lot of cases it involves more people labor than computer labor. For example, running a report from a software package and then manually inputting the numbers from the report to a spreadsheet so that an analysis or presentation can be personalized to either the client or the philosophy of the advisor.

    One recent example where we’ve been able to get some help from a vendor is AdvisorExchange, which uses CashEdge. We can now get a daily feed for cash flow account balances (bank accounts) which we use in our own system to record balances and calculate clients’ cash flows for those accounts. Our system then combines that data with our portfolio accounting system data so we can see clients’ "wealth transfers". We still have to manually update income and expense items we can identify (much of this data has to come directly from clients, which is always a bottleneck), and we’re continuously working on calculators to assist us in identifying and estimating holes in the data.

    We are also hopeful that Finfolio is going to provide opportunity for even more robust integration with portfolio accounting. They are developing their system as an open platform to encourage developers and firms to get out on the Long Tail.

    We’d also like to automate more of the projection process (Where they’re headed), but the nexus of accounting and projection is a hard nut to crack in a manageable way.

  2. July 25th, 2008 at 6:59 pm

    Pat Dempsey says:

    On the subject of the technology of web services:

    It’s true that one side of the web service, the server side that provides the data, requires an internet server, such as Microsoft’s Internet Information Server, or some other web server. This takes the care and feeding of an IT professional or department and is not cost effective for a small office.

    However, the consumer of the web service, aka the web service client, can be a desktop system or a web page. Just because it’s called a "web service" doesn’t mean that it can’t be used by desktop programs.

    Any desktop system with internet access can consume a web service just like a web page if it’s software is enabled to do so.

    We’re in the process of introducing our 4th generation CRM / Portfolio Tracking system that communicates with SQL Server either through a web service, or through the Internet using a Virtual Private Network (VPN), or a local area network inside of an office. Modern programs are built in tiers or layers, and the same program can provide multiple ways of accessing data depending on the size and capabilities of the organization.

    We’ve approached many institutions that provide data to our system and asked if they were interested in using a web service to provide the data. So far, none have been interested. Albridge is the only provider I know of that provides investment data to other systems via a web service and has done so for about 3 or 4 years.

    Anytime data needs to pass between a server and desktop or 2 servers, using web services makes sense.

  3. July 27th, 2008 at 6:26 pm

    Purna Pareek says:

    Although Web Services technology has been around for at least 7 years now, it is finally catching on in the financial services industry. However, it is primarily used in the large enterprises with big IT staff and less so in the smaller B/D or RIA organizations. The main reason for this lack of adoption is that the Web Services infrastructure provides only a pipe or transport mechanism between applications to communicate information but it does not dictate the message format which is still proprietary between each service. For example, to pull the data from Albridge and Cashedge (both use Web Services) you have to build two separate adapters even though the information content is almost the same. In an ideal world, I should be able to retrieve or save a client portfolio accounts and positions from Albridge, CashEdge, Pershing, DST or a Financial Planning Tool (such as AdvisorVision or Naviplan) or CRM application using the same Web Service Interface.

    I think what we need is to standardize on a data model (message format) for exchanging client financial information across multiple applications so the software providers can build and consume Web Services irrespective of who the data provider is. One great example of this effort is OFX standard that is used by Quicken and MS Money to pull the data from virtually thousands of financial institutions. More recently OFX 2.x has been XMLized and is now becoming more like a Web Service.

    Web Services standard is a good start but by no means it is sufficient to build the ‘silver bullet’ that can facilitate truly open data exchanges between multiple applications. If software providers have to build one to one interface for each application, then we will never achieve the true interoperability target. Only by creating data exchange standard like OFX on top of Web Services will we be able to get there sooner.

    We at AdviceAmerica have been using Web Services for years now and have developed data exchange standards and API (Application Programming Interface) primarily for larger institutions so they can build the adapters for their proprietary systems. We would be happy to contribute and participate in an industry wide initiative to develop a Data Exchange standard so the Independent advisors, RIA and IBDs can reap the benefits from the Web Services technology without the pain and agony they have to go through today.

    Purna Pareek, CEO, AdviceAmerica, Inc.

  4. July 27th, 2008 at 7:29 pm

    Andrew Gluck says:

    Purna Pareek’s point about the lack of standards is important.

    As vendors collaborate on creating Web Services, progress toward defining standards is beginning to be made.

    Market forces are pushing the vendors in the right direction and it will benefit advisors greatly when this gets momentum.

    But tech vendors and advisors will need to talk to each other a lot more about how we standardize exchanges of data if we hope to speed up integration.

    I’m planning on publishing a blog soon on authentication standards among financial technology vendors and that could further the discussion.

    I’m hoping my blog facilitiates the discussion among vendors and advisors.

  5. July 29th, 2008 at 6:17 pm

    Matt Abar says:

    I completely agree with Purna. Web services are a great thing, but *only* if we build them out within the framework of a generic industry file specification. If each vendor publishes their data using their own version of "web services" then we’re making the fundamental problem worse, and creating significantly more work for each vendor, which will ultimately result in increased software prices or decreased services.

    To Andy’s response: I’m not sure that web services are pushing vendors toward standardizing data. In fact, I think it’s making it worse for vendors.

    The post and comments prompted me to do my own blog post on the subject:

    Please keep all the comments here; it’s not my intention to hijack the thread. ;-)

  6. July 31st, 2008 at 9:42 pm

    Purna Pareek says:

    As Matt stated in his blog, I think an OFX like Standard is the answer to advisors problems when all applications can download important set of data from each other without worrying about whether it’s a CRM, Financial Planning or Portfolio app. Including Fidelity, Schwab, Pershing and TDA is great idea. Perhaps, we should form a consortiam of vendors willing to work together to design a standard from which we can all benefit. AdviceAmerica will be happy to contribute to this industry effort.

  7. August 1st, 2008 at 10:45 am

    Andrew Gluck says:

    I’d be happy to help as well. While previous efforts have been made, I’d like to create a focused group concentrated on creating standards.

  8. August 1st, 2008 at 8:05 pm

    Matt Abar says:

    I’m on board for creating a standards group for our industry. I’ve talked to several other vendors who are also interested. (But not any of the big four that I mentioned in my post.)

    I think the first step is creating a web site with a message forum so we can start signing up vendors and trading ideas.

  9. August 2nd, 2008 at 2:42 am

    Andrew Gluck says:

    I can create the message board and help keep the dicussion going. That’s not a problem. Also, my company has been keeping data about what applicatoins advisors use that I will be happy to share.

  10. August 6th, 2008 at 2:41 pm

    Chris Willis says:

    I also agree that a standard would solve a lot of problems. Our mobile application for advisors is, as Matt stated on his blog this week, best suited to be sold to the enterprise. Mobile applications need data from the existing data sources of the users. We have a library of plug-ins and web services hooks to make these connections, in order to deliver a composite mobile application. But an independent rep obviously doesn’t have the time, technology or budget to work with us to create hooks into his info vendor’s systems.

    With standards enacted, the advisor would be free to use a mobile solution that incorporates the data s/he needs to be productive, regardless of what that data is. We would be pleased to participate in an initiative to see this through. Count us in.

  11. August 10th, 2008 at 4:23 pm

    Damon Deru says:

    I would like to second some of the comments made on this board. It would be wonderful to finally have an industry standard. It’s mind boggling to me that it’s 2008 and our industry is as fragmented as it is, and it all comes back to this single issue.

    We are a new startup tech firm in the industry, and one of the biggest challenges we face is integration between not only the custodians, but the other industry vendors as well. As Matt stated, if we had an industry standard, then the vendors wouldn’t have to waste so much time building and maintaining interfaces with all the other custodians/vendors. This would lead to reduced software costs and/or increased service/features for RIA’s. In addition, it would lead to true seamless integration between the vendors, which equals significant time savings, less errors, etc. for RIA’s.

    I would be in full support of helping create a true industry standard. I think the first step (as has already been mentioned) is to create a seperate website/blog where there can be open discussion. I also think for this to succeed, it’s imperative to sign up as many of the major vendors AND custodians. Without their support, this will probably go nowhere. This would recquire some real mediation and salesmanship, because for them to change the status quo, is going to recquire a time & money commitment on their part. That said, it’s a worthy goal, and in the long run, this is going to save everybody (vendors, custodians, RIA’s) considerable time, money, and headache!

    Damon Deru
    CEO Nine Mile Software

  12. August 11th, 2008 at 5:02 pm

    Reed Colley says:

    Interestingly enough, I think there is validity to both sides of the standard interface vs. web service discussion. I have long been a fan of standardized data and view OFX as a building block to help us get there. I have also been a fan of flying cars, but as of yet, the tires are still on the ground (for the most part).

    Flexible web services seem to allow us to get what we’re after – typically a new, more efficient way to get from point to point. Great solutions often require a mix of both elements. The fluid nature of the Internet is a terrific example of the meshing of standard interfaces (HTML and JavaScript) and an immeasurable number of complimentary products and services built around or on top of them (ASP.Net, AJAX, Silverlight, etc.). I agree with Andy that advisors are looking for efficiencies and enhancements that are typically gained through exchange of information. How it happens is generally of little concern to them.

    My take is that the best way to tackle the right answer and the right mix is to listen to the clients and the marketplace and determine whether they’re looking for better information exchange with existing products and services or a true paradigm shift. That said, I’d be happy to participate in a standards group, if anybody’s interested. As one of millions of companies that has an entirely different delivery model than was possible 10 years ago, I’m excited to be a part of the dynamic landscape that will surely look different in another 5-10 years. I’m also still looking for my flying car.

  13. August 12th, 2008 at 8:37 pm

    Matt Abar says:

    "I think there is validity to both sides of the standard interface vs. web service discussion…" – Reed

    To clarify, I personally feel that a standard interface specification would include how to transfer files between appications, which should be a web service. One does not preclude the other.

    Building out "web services" without doing it within the context of a standard interface spec could be a nightmare. Every vendor has their own vision of what "web services" means. Sure, you get it over the web, but how? How do you log into the web services site? What transfer protocol will you use? Do we get static files, or does it generate a real-time update file when we hit the service? What does "web services" mean if we’re trying to get data out of a desktop application? Do I have to use HTTPS, or can I use unencrypted HTTP? How about an FTP site? etc.

    I also don’t think this will be an advisor-driven request without a lot of education and PR. Most advisors want their "Advent Axys to talk with Junxure" or something much closer to their immediate needs. It takes a sophisticated advisor to request "a data and transport specification supported by all industry vendors". If this specification is ever going to happen, it needs to be vendor-driven.

  14. August 13th, 2008 at 7:09 am

    Andrew Gluck says:

    If some of you would like to create a small committee, I will volunteer to write an easy-to-understand specification, like the kind Matt is talking about.

    Email me directly if you’re a vendor interested in joining at

  15. August 21st, 2008 at 12:05 pm

    Andrew Gluck says:

    To those of you who have emailed and called me, thank you.

    We are creating a private discussion board for qualified interested parties–vendors, consultants, as well as BDs, custodians, and advisors.

    The discussion board and supporting technology for th group will be available via Google and independent of my company’s site and my company.

    The effort and any entity arising from it will not be controlled by me or any other single member of the group.

    The goal of the group is solely focused on promoting discussion about and facilitiating creation of a generic specification for vendors offering applications to advisors to support integration of technology services used by advisory firms.

    No memberhsip fee is envisioned to be necessary and the name of the group is yet to be determined.

    We are looking for vendors in different software categories to healp organize committees. PMS, financial planning, CRM and other software categories will have their own committees to talk about data exchange among applications and how data elements can be standardized for use in Web services.

    I’ll post a separate blog here soon with more details and would appreciate constructive guidance.

    If you’d like to be part of the effort, please email me

  16. August 25th, 2008 at 11:44 am

    Eric Clarke says:

    We’d be happy to participate in a working committee to build out integration standards for advisor applications. The most important hurdle that we will have to overcome to put these together is getting resource commitments from each of the major applications types that advisors use. Count us in!

  17. August 25th, 2008 at 9:06 pm

    Purna Pareek says:

    Andy, we would be happy to help. Please include us in your list.

  18. September 24th, 2008 at 12:00 pm

    Kurt Box says:

    For our own selfish reasons we would love to see integration between PortfolioCenter, Junxure I and a website client portal. We love Junxure and mostly like PortfolioCenter and as you know they do already integrate to some degree. Unfortunately our Finc Planning software is Excel based (home built)but I would love to be able to integrate that with PortfolioCenter for FP udates. It is Excel simply because we were never happy with the flexibility of Naviplan, etc. Thanks Andy,

  19. September 25th, 2008 at 1:17 pm

    Gloria San Andres says:

    A handful of technology vendors are leading the way by integrating with each other using Web Services. Please let me know which applications would you like to see integrated? Which integrations have been working well for you? Which have not worked well? Please comment. Vendors need to know what you’re thinking.

    Answer: It will be so much easier to integrate the different applications with a link or with data export/import. It will be useful and much easier to integrate Advent Axys, Protracker, Worldox, Money Tree and Outlook. I am able to import market values and cash withdrawals from Axys to Protracker. I am also doing some data import from Axys to Money Tree. We do some Excel reports manually that may be integrated with the other software.

  20. February 16th, 2009 at 4:05 pm

    Roy says:

    I’ve subscribed to eMoney Advisor twice now: Once on my own, and once through LPL Financial’s Wealthvision. The promise is hard to resist: consolidate financial planning, asset allocation and integrate with client relationships. Account aggregation would be very impressive indeed. My experience, however, was that is was full of compromises: It excels at nothing and the aggregation was a daily headache, full of bugs and hitches. I switched to Upswing CRM, and have recently added MoneyGuide Pro for goals based financial planning and asset allocation. I can switch to Redtail or Morningstar Advisor workstation, and have account aggregation through Albridge. They all work great together, are much more cost effective and there are no compromises. I have a tremendous amount of flexibility. eMoney has tried to be the "silver bullet", but really is just a Veg-O-Matic.

  21. February 17th, 2009 at 11:11 pm

    Robin Jordan says:

    I supervise the scheduling and data input for a Redtail CRM database of over 30 users. We use the CRM for it’s amazing scheduling and client relations functionality.

    My firm’s B/D has it’s own CRM/PMS/FPS solution but the calendaring is nowhere near being capable of what we’re doing with Redtail.

    Now, after reading "Tell Vendors What You Think About Integration", I am motivated explore the possibilities for our financial and calendaring systems to be integrated.

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