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Why advisers use account aggregation

Financial advisers build comprehensive portfolios, plans, and forecasts for their clients to ensure they will reach their future goals. However, many advisers lack the accurate information they need, rely on guesswork from their clients and find it time-consuming to determine information like income and expenditure. Account aggregation can be one of the easiest and fastest ways for financial advisers and wealth managers to demonstrate value to new prospects and existing clients. 

In this article, we look at the necessity of account aggregation in the modern financial advice industry, explore how it works and why it's crucial for delivering superior advice and managing client expectations effectively. We'll also discuss how moneyinfo's approach to account aggregation can transform your advisory service, making it more efficient, secure, and client-focused, and how account aggregation provides a more comprehensive view of a client's wealth. Here’s an overview:

  • The necessity of account aggregation in financial planning.
  • What account aggregation should do.
  • The mechanics of account aggregation.
  • Enhancing client relationships through account aggregation.
  • Account aggregation, the small print.
  • The future of financial planning with account aggregation.
  • Security and compliance in account aggregation.
  • Case studies and success stories in account aggregation.
  • Getting started with account aggregation.

As the financial landscape evolves, understanding the role of technology in enhancing client engagement and operational efficiency has never been more important. Embracing account aggregation is essential for staying competitive and meeting the needs of today's tech-savvy clients, which is why account aggregation has become a non-negotiable element in the modern financial advisory landscape.

The necessity of account aggregation in financial planning

Financial planning is as much about the quality of the data as it is about the results and account aggregation can play a starring role in pulling the data together making life easier for the adviser and reassuring the client that the advice delivered is based on the latest and most accurate data available.

Today's clients expect a digital-first approach that offers both convenience and personalisation. Account aggregation meets this need by delivering a comprehensive view of their financial situation, accessible anytime, anywhere. This not only enhances the client experience but also empowers advisers with the information they need to provide tailored advice.

The days of manual data collection should be numbered. With clients' financial information spread across multiple institutions, gathering this data without a consolidation tool is both time-consuming and prone to errors. Account aggregation automates this process, ensuring advisers have up-to-date information at their fingertips, enabling more time to be spent on strategy and client relationships. Account aggregation is a key piece in the financial planning puzzle, a bridge between traditional advice methods and the future of financial planning. 

Having a holistic view of a client's financial landscape allows advisers to make better-informed decisions. Whether it's assessing risk, identifying investment opportunities, or ensuring that a client's portfolio aligns with their long-term goals, the insights provided by account aggregation are invaluable.

Firms that leverage account aggregation are not just keeping pace; they're positioning themselves as forward-thinking, client-centric, and ready to tackle the challenges of the 21st century, confidently equipping them against advisers who don’t utilise account aggregation as much as they could.

What account aggregation should do

  • Account aggregation should deliver a new factfind experience.

Remove the guesswork and paper forms for advisers and clients in establishing a true financial picture. Typical discovery meetings result in clients doing huge amounts of work before they see any value from their adviser. Account aggregation client portals like moneyinfo can take this pain away by securely linking to a client’s online personal finance and investment accounts and bringing the required information into a single screen.

  • Account aggregation should deliver better advice.

Advisers need to know how non managed accounts are performing for them to determine whether the client is taking the appropriate risk, is not being over charged or sitting in underperforming funds.

  • Account aggregation should accelerate assets under advice.

Greater and easier insight on the client’s total wallet allows advisers to determine what can be better managed in-house.

  • Account aggregation should allow advisers to manage the whole picture.

Having access to what your clients own, owe, earn, and spend and seeing how each account relates to another allows an adviser to use that knowledge to deliver comprehensive financial planning advice.

  • Account aggregation should streamline communications.

If clients can access their financial information securely in one place, then they will expect to see the associated correspondence (contract notes, suitability letters, wills etc) in the same place too. Account aggregation services should aggregate the associated paperwork as well as the financial data.

  • Account aggregation meets your clients’ expectations.

Clients expect their advisers to give them a 360-degree view of all their finances, assets, and liabilities in one place. They want one place to go where they can login and see everything. They come to you to make their life easier and expect this convenience.

The mechanics of account aggregation

Understanding the inner workings of account aggregation is not essential for appreciating its value in the financial advisory process but it helps to have some knowledge of how it works and some of the shortfalls which over time will be improved. At its core, account aggregation is a sophisticated technology that gathers financial data from various sources and presents it in a unified, easy-to-understand format.

Here’s how it works:

Establishing Connections: The first step involves creating secure connections with a multitude of financial institutions. These connections are the lifelines of the aggregation process, enabling the seamless flow of financial data from banks, investment accounts, pension funds, and more, directly to the adviser's dashboard.

Data Synchronisation: Once connections are established, the aggregator synchronises the financial data, ensuring that advisers have access to the most current information. This synchronisation occurs at regular intervals, most often daily, to ensure that the financial overview is always up to date.

Security Measures: Security is paramount in account aggregation. Techniques such as encryption and secure tokenisation ensure that sensitive client information is protected. Moreover, leading aggregators utilise advanced security protocols, like OAuth, for authentication, minimising the risk of unauthorised access.

Client Portals: Aggregation technology powers client portals, where individuals can log in to view their entire financial landscape in one place. These portals are designed with user experience in mind, making it easy for clients to understand their financial situation and engage more deeply with their financial planning.

Actionable Insights: Beyond just gathering data, sophisticated aggregators analyse the information to provide actionable insights. This might include identifying spending patterns, investment opportunities, or areas where clients can save money. These insights are invaluable for advisors seeking to offer proactive, personalised advice.

Integration with Advisory Tools: Finally, the aggregated data can be integrated with other advisory tools, such as financial planning software and CRM systems. This integration enhances workflow efficiency, enabling advisors to spend more time on client engagement and strategic planning rather than on administrative tasks.

Account aggregation reliability: Account aggregation within moneyinfo provides an added feature to allow advisers and clients to see the ‘valuation strength’ of their accounts and understand how up to date the data is. Similar to a WiFi symbol, it shows how regularly the information is updated under an account. This feature is especially helpful for clients who log in regularly to check their accounts. If you’d like to understand this further, please book a personalised demonstration to see this and the many other benefits of a moneyinfo portal for yourself.

Enhancing client relationships through account aggregation

Account aggregation plays a pivotal role in transforming the adviser-client relationship. By offering a comprehensive view of an individual’s financial landscape, it facilitates a more personalised and engaging adviser experience. The technology allows advisers to not just react to client needs but anticipate them, offering tailored advice based on a complete understanding of their financial situation.

The depth of insight provided by account aggregation means advisers can identify opportunities and risks that might otherwise go unnoticed. The proactive approach demonstrates to clients that their advisers are truly invested in their financial well-being, fostering trust and loyalty. Furthermore, the convenience and transparency of having all financial information accessible in one place significantly enhances client satisfaction. They feel more in control of their finances, which in turn, makes them more open to discussions about financial planning and investment strategies.

In essence, account aggregation is more than a tool for data consolidation; it's a means of deepening client relationships, making each interaction more meaningful and productive. By leveraging this technology, advisers can create a service experience that not only meets but exceeds client expectations, setting a new standard in financial advice.

Account aggregation, the small print

As it stands today, the vision of a more integration enabled financial landscape is a slow burner. Aggregation of advised assets has never been better. We have more than 50+ platform, provider and third-party technology systems integrated. These are fully managed services that deliver clean, refreshed, and reliable data for the adviser and client.

It should be easy to pull together external accounts – banking, credit cards, mortgages alongside held-away financial assets – company pensions, investment trading accounts etc and with open-banking and open-finance initiatives that have been running for many years it is disappointing that the technology can be unreliable.

It’s not yet at consumer app standard i.e. it goes wrong at least 1% of the time and this isn’t good enough for clients to rely on it. It can provide accurate data especially for income and expenditure and using screen-scraping technology many held-away accounts can be pulled into the client view. We currently recommend that external account aggregation using open-banking and open-finance is used only as a tactical solution. Moneyinfo supports what is available today and it is fully integrated with our collaborative factfind. Use open banking with clients where accurate income and expenditure is essential to the financial planning process and help your client to input their accounts and help them navigate the technology.

The future of financial planning with account aggregation

As we look towards the future, account aggregation is set to redefine the landscape of financial planning. This technology is at the heart of a shift towards more dynamic, responsive, and client-focused advice services. With advancements in data analysis and security, advisers will be equipped to offer even more personalised and proactive advice. The integration of account aggregation with emerging technologies promises to enhance the adviser's ability to anticipate client needs and tailor strategies, accordingly, ensuring that financial planning remains at the forefront of innovation and client satisfaction.

Security and compliance in account aggregation

In the digital age, the security and compliance of account aggregation services are of utmost importance. As advisers integrate these technologies into their practices, ensuring the confidentiality, integrity, and availability of client financial data is paramount. This commitment to security must not only adhere to regulatory requirements but is imperative in cementing the trust between clients and their advisers, the crucial component of successful financial planning.

Robust encryption and data protection: At the heart of secure account aggregation is robust encryption technology. Encryption ensures that all client data, as it travels between financial institutions and adviser platforms, is unreadable to any unauthorised parties. This minimum safeguard is complemented by stringent data protection policies, which dictate how data is stored, accessed, and used, further ensuring client information remains confidential and secure.

Authentication and authorisation protocols: Authentication protocols like OAuth play a critical role in the security architecture of account aggregation services. By using tokens instead of storing client credentials, OAuth minimises the risk of data breaches while facilitating secure, seamless access to financial data. This method not only enhances security but also provides clients with greater control over their information, allowing them to manage access permissions with ease.

Regulatory Compliance: Compliance with financial regulations and standards is a non-negotiable aspect of account aggregation. From GDPR in Europe to various financial service regulations worldwide, adherence to legal frameworks protects both advisers and their clients. This compliance ensures that services are not only secure but also operate within the bounds of the law, offering peace of mind to all parties involved.

Continuous monitoring and updates: The landscape of cyber threats is ever-evolving, and so too are the security measures employed by account aggregation services. Continuous monitoring of systems for vulnerabilities, along with regular updates and patches, ensures that defences remain robust against new threats. This proactive approach to security underscores a commitment to safeguarding client data at all times.

Right to Privacy under GDPR. With moneyinfo’s account aggregation, as well as security on behalf of the financial adviser, clients have their own personal privacy controls which allows them to decide who to share their data with, including holding personal accounts they don’t want even their adviser to view. This may seem of little benefit to you, but it can give clients the confidence to pull together all their financial information into your app, giving you a competitive edge when introducing yourself to new prospects. If you can offer this over your competition, it may be the reason you gain a new client.

Case studies and success stories in account aggregation

To view our case studies and success stories please click here.

Getting started with account aggregation

To get started with account aggregation please click here to organise a personal demonstration.