Financial Advisor Marketing & Technology

Marketing & Technology For Independent Financial Advisors


Surprise! Account Aggregation Works!

I’m shocked that it works so well, surprised it was not more complicated to set up, and amazed at how useful it is. I’ve got to admit that account aggregation from Advisor Exchange is good! It may even be on the way to becoming great!

The reason why I was so surprised is that account aggregation has taken so long to come of age that I began to think it might never really work. You see, when account aggregation first appeared a little over a decade ago, I was one of the first people to write about how great it was. I never thought it would take 10 years to get it right!

What happened? Like so many Web wonders, the excitement surrounding account aggregation in the heady dot-com days of the late 1990s gave way to real world problems. Formidable obstacles to adoption had to be overcome before aggregation could be used in an advisor’s practice.

One obstacle was that it was complicated to implement. A decade ago, no one had online accounts and almost nobody felt comfortable putting personal information online. Yet advisors had to convince clients to set up online accounts with brokerages, banks, mortgage companies, credit card issuers, and insurers, and then they had to pass on their user IDs and passwords to your firm. Or advisors had to do all of the paperwork and set up their clients.

Another obstacle to adoption was the increasing complexity over the last 10 years in online security. A second layer of authentication, known as “site keys,” was installed by banks, and institutions began automatically suggesting clients change their passwords every six months. With log-in parameters constantly changing, an account aggregation application might work one day and fail the next.

After the dot-com bust, funding for development of aggregation applications dried up. Many advisors gave up trying to make the troubled systems work. I, too, gave up on it and don’t recall writing about account aggregation in my magazine column more than once in the past 10 years.

So it was with great skepticism that I tried again recently. I acquiesced to requests from Advisor Exchange to create an interface displaying aggregated account data on our Personal Client Portal Platform. Whenever a client logs into his Personal Client Portal, a single sign-on with Advisor Exchange pulls in snapshot of all his accounts from brokerages, insurers, banks, credit card companies, mortgage banks, 529 Plans, 401(k) providers, and the full range of other financial product providers.

Following several months of development, the interface was finally completed two months ago. All I had to do was set up my own accounts to test the interface. It took me two months to do this! Which brings me to the main problem with account aggregation: the hassle involved with inputting your accounts passwords.

Truth is, I delayed inputting my account data for weeks because I assumed it would be a giant hassle. I assumed nothing much had changed with account aggregation. I was wrong. It was actually pretty easy. Take a look at the screen shots and you’ll see how the handful of real accounts—ranging from stocks held at Schwab, a 401(k) held at T. Rowe Price, and bank accounts are being aggregated. It took me about an hour to set up an aggregated view of six accounts.

Like I said, I am amazed that it works, that the data are useful, and that it was easy. Surprise! Account aggregation works!

For more information about the Advisor Products Account Aggregation interface with Advisor Exchange, call Barry Weinstein at Advisor Products at (888) 274-5755.

3 Responses to “Surprise! Account Aggregation Works!”

  1. December 3rd, 2008 at 12:48 am

    Bill Winterberg says:

    Nice to see that you’re once again pleased with account aggregation. It sounds to me like ByAllAccounts, another aggregator, does what Advisor Exchange can do.

    But it seems that BAA interfaces with a lot more portfolio management programs (e.g. PortfolioCenter, BlackDiamond, Advent, dbCAMS, etc.). I don’t see those listed as partners on the Advisor Exchange website.

    It’s one thing to get a net worth snapshot, but it’s a huge advantage for an adviser to get prices, balances, and especially transactions imported into a portfolio software program. This can yield accurate cost basis reports for taxable accounts and better rate-of-return figures.

    Interested in a head-to-head match-up between AdvEx and BAA?

  2. December 3rd, 2008 at 9:01 am

    Andrew Gluck says:

    I’ve heard good things about ByAllAccounts (BAA) from advisors who use the systsm. Advisor Products is already working with technical staff at BAA on a specification for a web interface. This web service will pull BAA’s aggregated account feeds into client portals, delivering data on positions and balances from accounts aggregated by BAA. Because eveything in technology takes much longer than it should, I expect the BAA interface to be in production by late 2Q09.
    I remain skeptical about using account aggregation to create performance reports. I’ve heard from a few advisors over the past year or two who say they are doing this, and BAA is focused on using aggregatoin in portfolio systems. Getting normalized data out of feeds used by aggregation service like BAA and Advisor Exchange is challenging. Maybe some advisors who are using account aggregation with portfolio accounting software can tell us here about their experiences. Until I get more information from advisors who are doing this successfully, I’ll reserve judgment on how well it works.

  3. December 3rd, 2008 at 5:45 pm

    Bill Winterberg says:

    I’ve used BAA for reconciliation since February 2008 and I am satisfied. I give them a rating of 4.5 out of 5.

    I’ll post a review of BAA to in the next few days.

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