3 Ways Account Aggregation Can Help Your Practice in 2014

By Cynthia Stephens, VP of Marketing, ByAllAccounts on Thursday, November 21st, 2013

 In the past few years many RIAs have come to realize that clients with retirement accounts not currently being administered by one of their custodians represent a sales opportunity.  By integrating these outside assets into rebalancing software they can better service clients and increase revenue if they choose to bill on those assets.  If you don’t yet realize that you can manage 401k money for your clients, you are missing a growth opportunity. 
Account aggregation solutions offer a scalable way to efficiently monitor and report on outside assets.  Below are three of the reasons we frequently hear from advisors on why they decided to use account aggregation to manage and report on outside assets.

  1. Improve operational efficiency by eliminating manual data entry   

If you are already reporting on your client’s entire book of business then using account aggregation will save you time, time that your operations team can reallocate to other activities.In a recent survey 61% of advisors who use aggregation reported having an Extremely/Very Efficient back office, versus 37% for those who manually enter the same data.  In addition, aggregation reduces the risk of data errors, decreases the time required to create client reports and lowers the burden on the operations team.

  1. Provide additional growth by managing a client’s entire book of business 

Firms using aggregation for outside assets need to make a business decision about billing on them.  Many opt not to charge a fee.  For others, managing outside assets presents expansion opportunities and a path to increasing assets under management.  Even if you don’t bill on outside assets, reporting on them in the most efficient way possible allows you to be your client’s financial quarterback.

At a time when high-net-worth clients may have relationships with more than one advisor (e.g., a spouse has additional investments with a wirehouse from an inheritance), calling the plays for them deepens your relationship and increases the likelihood of securing those additional assets over time.

  1. Eliminate possession of client credentials 

In the current regulatory environment compliance concerns are top of mind.  Some RIAs who have clients with retirement accounts not currently being administered by one of their custodians don’t want the added responsibility that comes with having custody of credentials in order to report on them. 

You may not know that you can manage 401k assets for your clients using automated account aggregation and not take possession of client login names and passwords. 
The SEC recently contacted us directly to discuss aggregation and the custody rule.  Here’s the SEC’s opinion, which we communicated in a letter to our clients:
“Using ByAllAccounts’ data aggregation solutions would cause no problem whatsoever for advisory firms being audited.”
For all the details about our conversation with the SEC and much more, download a recent whitepaper on how to prepare for an SEC exam.  
Don’t take my word for it. Take a look at the benefits other financial advisory firms are receiving. 
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