Technology is rapidly changing the competitive landscape for financial advisors, from blockchain technologies that improve data distribution to consumer-facing technologies like mobile apps and client portals that enhance the client experience. With the rise of robo-advisors like Betterment and Wealthfront, these operational and consumer-facing technologies are becoming increasingly necessary to remain competitive.
Many advisors already use technology to rebalance portfolios or manage contacts, but client-facing technology has quickly evolved from a “nice to have” to a “must-have” feature. With the rise of apps like Mint, clients expect 24/7 access to all investment accounts via the web or a mobile app. The good news is that new technologies are making these client-facing features easy to implement in your business.
In this post, we will look at how you can quickly determine a client’s net worth, how to use that information to maximize profitability and the client experience, and how our Intelligent Aggregation platform can help.
How to Determine a Client’s Net Worth
Fifty percent of Americans have more than one bank account and multiple types of investments (and seven percent of those have more than five accounts).
Managing multiple accounts used to be a huge pain, but then along came Mint in 2007, promising centralized account management. Within two years, they had over one million users and multiple imitators.
Clearly, people don’t want to remember tens or hundreds of different accounts and passwords – they want a 360-degree view of all of their assets and liabilities in a single place.
Account aggregation is becoming a must for financial advisors – and it’s not just for client convenience. By aggregating a client’s financial accounts, advisors can get an unprecedented look into their entire financial picture and determine their full net worth. The best part is that clients are more than willing to provide this access to see where they stand, while the information is updated in real-time without any effort by either party.
There are many different data aggregators for financial advisors to choose from, with many different levels of flexibility and limitations.
The Wealth Access Intelligent Aggregation data engine includes direct feeds from more than 20,000 institutions through multi-tiered data sources, including hard-to-report-on assets like private investments, which makes it one of the most comprehensive options in the industry.
As Richard Archer, from Archer Investment Management in Texas said, “Wealth Access provides the most powerful aggregation tool I have found out there and will be a tremendous help in facilitating our financial planning process.”
How a Full Picture Transforms Relationships
It’s difficult to overstate the value of having a complete up-to-date look at a client or prospect’s net worth. While this once involved requesting statements from clients, data aggregation technologies have automated the process and made it easier than ever to have the information at your fingertips.
In the prospecting phase, account aggregation can have a significant impact on closing a sale. Providing a mobile app or client portal that aggregates accounts enables prospects to “try before they buy” and get an idea of what it’s like to work with you. At the same time, you get insights into prospects’ complete financial picture and can use that information to craft customized proposals and ask pointed questions in meetings.
After signing a new client, data aggregation can dramatically accelerate asset gathering by enabling clients to quickly and easily share their data on the first day. Advisors become a “full service” partner that monitors and manages every asset, while charging appropriate fees on held-away assets. The information is also kept up-to-date at all times, which reduces client questions and enables advisors to focus on value-added services.
Data aggregation can be even more valuable for HNW clients, who tend to spread their investments across account types and advisors and may be hesitant to consolidate everything right away. Rather than trying to convince them to consolidate immediately, advisors can offer complete account performance and become the “go-to” person early in the relationship, with the long-term goal of working toward account consolidation.
Wealth Access published a study showing that its data aggregation platform helped the average advisor grow revenue by $2,000 per client by accessing additional held-away assets and bringing them onto a managed platform. At the same time, the client portal enables clients to access their information anytime and helps reduce the time you spend answering basic questions or trying to get clients to update their financial accounts manually.
The Bottom Line
Account aggregation has rapidly evolved from a “nicetohave” to a must-have feature for financial advisors. If your firm doesn’t offer it, chances are your clients are getting the functionality from another service that is hoping to land your clients’ business.
Schedule a demo with Wealth Access today to see how wealth aggregation can improve your prospecting process and enhance your relationship with clients.
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