Simplifying the Mystery Around Accessing Held-Away Account Data

Getting data into an account or a reporting platform can be a bit complicated.  To start, you will need to decide among several types of data feeds when you are pulling in information. Consider your goals: Do you want to report only on your traditional custodial assets? Would you like to provide your clients with a holistic “total” view of all their resources so you can more completely advise them on their options?

Here are some key items to consider:

  • Traditional custodial feed
    1. Individual client site access
    2. Advisor level site access
  • Direct access feed

With a Traditional Custodial feed, pulling data from a traditional custodian (or several) into an accounting or reporting platform is a fairly standard process. This data feed is available from the financial institution where you, the advisor, have a direct relationship. You can choose either to do the set up and maintenance yourself or to work with an accounting and reporting system, such as Envestnet, that will handle all the back-office services for you.  There may be paperwork involved that requires your signature and possibly, your clients’.  The data flows from the financial institution into the accounting or reporting system on a nightly basis. Your back office service provider, if you happen to use one, manages that data, preparing it for your use, providing daily reconciliation, reporting and rebalancing functions.

  1. Advantages

    1. the data flows directly from the financial institution into the system with minimal intervention

    2. the availability is consistent and controlled by the receiving system

  2. Disadvantages

    1. the advisor must have a relationship with the financial institution, usually at an institutional level

    2. client accounts have to be assigned to the advisor’s feed via paperwork bearing the client’s signature.

With the traditional feed in place, how do you get to the non-traditional data—the held-away assets such as bank accounts and 401(k)s—that you may need to track? Fortunately, there are several ways to set up the data stream.

Individual Client Site Access – Using an account aggregator like ByAllAccounts, you can gain access through a client’s own security credentials. You can enter the credentials into the system directly or you can arrange to have your client enter credentials into the system.  Be aware, though, that if you enter the credentials, you may create a custody situation[1] that will require you to comply with independent audit requirements. If your clients enter their own credentials, you can avoid the custody issue.

After entry, the account data will flow securely from the financial institution to the ByAllAccounts data servers nightly and be available for download in the morning.  Services like Envestnet can assist with the maintenance of this data for reporting and rebalancing use.

  1. Advantages

    1. you can get access to accounts that are not linked directly to you

    2. daily download of held-away account data into your reporting and accounting system can enhance your productivity and ability to manage your clients’ assets

    3. provide an opportunity to bill on these held away assets to increase your revenue

  2. Disadvantages

    1.  using client level credentials can cause issues. Your client may change a password and forget to inform you or access may become “locked,” requiring the client to reenter information

    2. the financial institution site may not be available when the updates are completed or the custodian may change the site format, requiring intervention

    3. not having possession of the client credentials can make reconciliation more difficult

    4. having possession of the client’s credentials may create a custody situation.

Advisor Level Site Access – Again, using an aggregator like ByAllAccounts, you can enter advisor level credentials into the system. This type of credential allows access to multiple clients’ accounts at one time. To obtain this type of access you need either a relationship with the financial institution as an advisor or to be granted access through signed Letter of Agreements from your clients.  This may require paperwork similar to the Direct Feed.  Depending on your level of access, you may have a custody situation.  To avoid a custody situation, request read-only or view-only access.

  1. Advantages

    1. you can get multiple accounts with a single login versus one for each client

    2. if you request read-only or view-only access the custody risk is low.

  2. Disadvantages

    1. the site may have an issue or data format change that will require intervention

Direct Access Feed – When the advisor has a relationship with the financial institution or can gain access to the accounts at one financial institution by requesting a multi-client login, an aggregator such as ByAllAccounts can set up a feed on Secure File Transfer Protocol (SFTP) sites.  The advisor requests that the linked accounts be put on a SFTP feed.  ByAllAccounts then works with the financial institution to make that data available through the nightly process and ready for downloading to the accounting or reporting system in the morning. 

  1. Advantages

    1. the login credentials for an SFTP don’t need a periodic reset

    2. the chance the “site” will be down is low

    3. the data format stays consistent

    4. there is  low risk from a custody perspective

  2. Disadvantage

    1. Advisor needs a relationship with the Financial Institution (FI)

    2. The FI may require paperwork signed by client

Many Financial Institutions have been adding digital certificates and other forms of security to their sites.  This has made it difficult for data aggregators to retrieve data from those sites.  ByAllAccounts has been working on ways to improve the process with technology as well as building relationships with the financial institutions and the platforms that support them.  Recently ByAllAccounts has added access for any financial institutions on the Accunet platform.  ByAllAccounts has an alternative access that does not require the digital certificate for any financial institution where the Uniform Resource Locator (URL) has accunet.trustasc.com as part of the web address.  If you are interested in getting access to any site that utilizes the Accunet platform, please contact your Envestnet relationship manager or sales@byallaccounts.com.  The way in which you choose to gain access to information will depend on your business needs. But one thing is certain: The more information you can get regarding your client’s assets, the better prepared you will be to offer insightful advice to your clients.

ABOUT ENVESTNET (NYSE: ENV)

Envestnet, Inc. (NYSE: ENV) is a leading provider of unified wealth management technology and services to investment advisors. Our open-architecture platforms unify and fortify the wealth management process, delivering unparalleled flexibility, accuracy, performance and value. Envestnet solutions enable the transformation of wealth management into a transparent, independent, objective and fully-aligned standard of care, and empower advisors to deliver better results.

Envestnet’s Advisor Suite® software empowers financial advisors to better manage client outcomes and strengthen their practice. Envestnet provides institutional-quality research and advanced portfolio solutions through our Portfolio Management Consultants group, Envestnet | PMC®. Envestnet | Tamarac provides leading rebalancing, reporting and practice management software.

For more information on Envestnet, please visit www.envestnet.com.

You may also be interested in:

What data sources information do you need to get started with account aggregation? (Blog post by Cynthia Stephens, VP of Marketing, ByAllAccounts)

15 Compliance Trends That Will Impact Your Practice in 2014 (Whitepaper)

Watch a 2 minute video on aggregation


[1] The SEC states “an adviser has custody if it has the authority to withdraw funds or securities from a client's account.”  If an adviser has the credentials of their client’s accounts and can withdraw funds with those credentials then it is deemed that the advisor has custody according to that definition.  For more reading on the definition of custody according to the SEC, http://www.sec.gov/rules/final/ia-2176.htm#IIA.

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