6 ways account aggregation is enhanced with financial planning

October 18, 2016 by Logan Lee

Young black woman reading a tablet outside checking her account aggregation application and financial plan

About the author:

Logan Lee

Vice president, U.S. sales

He has been at Advicent for over three years and has enjoyed learning more about advisors and their businesses. He is especially passionate about helping advisors understand the importance of financial planning and client communication.

In an ever-evolving technology space where old practices are trending digital and new digital trends are changing the way we think, I would like to focus on the impending melding of two giant “must haves” for clients in the financial space.

These “must-haves” are a comprehensive financial plan and account aggregation. Although there are other needs for consumers in the FinTech atmosphere, I would like to focus on why these tools are most beneficial for both advisor and client when utilized together.

Why is account aggregation better in conjunction with a comprehensive financial plan?

1. Without the ability to track progress against a plan, numbers do not mean much.

Do not get me wrong, tracking numbers and analytics is beneficial; however, the numbers alone do not tell the entire story. How do you measure progress or whether a financial strategy is working or not? Unless you have goals and a plan that looks at all areas of a client’s financial life, how does the client know if they are progressing in the right direction?

2. Client retention is more important than ever. Why forfeit a portion of your client’s assets to a third-party vendor?

Client retention is key. Unless an advisor is able to monitor or manage all of a client’s assets, how can the advisor be certain the client is receiving accurate, valuable advice from a third party? The financial services industry is now about consistently providing added value. Offering clients account aggregation that fits into a comprehensive financial plan not only provides convenience and collaboration to the client, but also enhanced insight and accuracy of recommendations for advisors.

3. Planning is becoming more client-centric and less episodic, advisors need to offer technology to fill the value gap.

This parallels almost every industry in our economy, as well as our view of commerce and business. Think of the emergence of the Chief Customer Office, that is a role that did not exist until very recently. Think about companies who are thinking about optimizing and increasing client experience – how is that executed? Advisors must now utilize technology (such as account aggregation and financial planning software) that provides accurate advice, ongoing plan updates, investment details, and anytime access. That is the power of moving from just account aggregation, to account aggregation with a financial plan.

4. It uncovers additional assets in a value-friendly way to see the entire picture.

Without being able to see your browsing history, companies would not be able to offer you advertisements about relevant products. Financial planning enhances account aggregation in the same way – through account aggregation, advisors can offer the most value by better anticipating client needs.

5. By giving greater detail, advice can be offered in greater detail.

The detailed information that aggregation provides about daily cash flow, along with long-term projections can be extremely beneficial to the planning process. A great financial plan is one that is comprehensive and holistic; it shows everything in detail but conveys it in an easy-to-understand way. If an advisor misses out on daily cash flow information, it could have a massive effect on a financial plan. The details provided by utilizing financial planning in conjunction with account aggregation allow advisors to provide more accurate recommendations and better anticipate client needs.

6. The evolution of financial advice as it relates to digital delivery.

There has been a shift in consumerism and business. The way we live, the way we buy things, the way we do business has all shifted. Financial planning has also shifted from meetings between 9:00 AM and 5:00 PM Monday through Friday and receiving paper statements, to having 24/7 online access to digitally manage a financial plan and other financial information. Due to this shift, clients now expect convenience, value, and transparency.

No more "racing to the bottom" 

Advisors only stand to do themselves a major disservice by failing to utilize and offer account aggregation because consumers will simply get it somewhere else. By bringing account aggregation into an advisor’s planning process, they build more trusting relationships and provide recommendations based on a comprehensive look at a client’s financial life.

Advisors are no longer racing to “the bottom” to offer the lowest cost. Seth Godin explains it like this, “There's always the opportunity to cut a corner, sacrifice lifestyle quality and suck it up as we race to grab a little more market share. But the problem with the race to the bottom is that you might win.

Advisors are now focusing on racing toward the top and offering the most value. For modern advisors, adding account aggregation into their planning process is the next step toward providing the added value necessary to achieve and maintain a competitive advantage.

Click here to learn more about utilizing the Narrator® Clients portal from Advicent featuring account aggregation through Quovo® in your planning process.