Client Profile: What I Say When Someone Asks, “Is Data Aggregation Right for My Firm?”

By Cynthia Stephens, VP of Marketing on Thursday, July 21st, 2011

Often, at ByAllAccounts, we’re asked, “Is data aggregation the right solution for my firm?” Naturally, as you’d expect, we have a distinct point of view on this question, and are inclined to answer with a resounding “yes.” But simplistic answers aside, we find that it’s often helpful to answer this question by referencing case studies of advisory firms that are successfully using ByAllAccounts’ data aggregation services.

One of the case studies I’m most inclined to cite is the work that we and our partner, Envestnet Asset Management, have done for Asset Strategy Consultants, based in Boston. Asset Strategy Consultants is an RIA that focuses on two primary markets—fiduciary planning for qualified plans and wealth management for high-net-worth individuals. Back in 2001, they made the strategic decision to outsource their back-office functions to Envestnet, relieving themselves of having to spend time and money on non-core functions such as billing services or running a client-facing website. The decision to outsource was a wise one—and it transformed Asset Strategy’s business, both in terms of efficiencies and economies.

Now jump ahead to 2010. This is where the sequence of events gets particularly exciting from a revenue generation point of view. And it’s what I tell potential clients to focus on when they’re considering the bottom line impact of adopting ByAllAccounts data aggregation services. Here are the facts: Envestnet had direct links in place with multiple custodians, but as you might surmise, not all client assets were covered as part of this arrangement. To supplement the data feeds, Asset Strategy Consultants brought in ByAllAccounts. Aa strategic partnership with Envestnet gave ByAllAccounts the opportunity to use our account aggregation services to deliver daily reconciliation-ready data to Envestnet’s reporting and billing platform.

The challenge was clear. When I spoke to Kent Fitzpatrick, Managing Director of Asset Strategy Consultants, he told me, “Before the ByAllAccounts relationship, there was no eloquent way to get access to accounts not in the Envestnet feeds.” The problem, Fitzpatrick continued, was that it was difficult for the Asset Strategy team to support high-net worth clients who wanted them to manage their employee-sponsored 401(k) accounts and other held-away assets such as mutual funds, bank CDs, trusts and other accounts where Asset Strategy was not the advisor on the account.

Bringing in ByAllAccounts was the logical solution: now, we automatically deliver the needed positions, transaction details and balances. But here again, I don’t want to sound like a member of a boosters’ club. So I’ll let Fitzpatrick tell you in his own words: “The ability to view and monitor these assets daily and do performance analytics has changed the game completely. Today we can provide full services to these accounts and bill accordingly through Envestnet’s platform. Without data aggregation technology, we would never have been able to bring in these outside assets in an efficient and professional manner. This value-added service has enabled us to increase our AUM by 40% to 50% for clients by actively soliciting their held-away assets.”

Those are dramatic figures, to say the least. So…chances are, the next time a potential client asks us whether data aggregation is right for them, we may refer at some point to the Asset Strategy case study—providing it has relevance to the particular business situation under discussion. It’s compelling (more details are available if you’d like), the numbers are right, and it perfectly illustrates the aggregation advantages at hand.

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