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The New Trend Shaking up Advisor Tech Platforms

September 22, 2020 Jeff Quigley By Jeff Quigley

For decades, our industry has been configured to promote transactional business and product sales. And has not focused deeply on processes such as client experience, financial planning, or tax optimization… Until now.

Because times change and client expectations have evolved, so has the financial services community. Especially when it comes to FinTech.

We have made great strides in technology as it relates to improving the digital experience, creating efficiencies, infusing automation and the quality (and quantity) of integrations.

However, there is still a significant void regarding coordinating investment accounts owned within a household – and taking the asset allocation to the household-level.

Using One Asset Allocation for the Household

At most institutions, aggregated data is commonplace.

With many simple ways to get a consolidated view of the household, why do so many advisors still implement investment and tax strategies account by account?

Reality check: simply “looking” at a client’s assets from the household level is not managing at the household level. It’s not sufficient and certainly is not what is best for the client.

We must implement at the household level.

Truly implementing at the household level is the only way to ensure you’re optimizing for risk and tax efficiency.

Easier said than done, I know…coordinating technologies for proposal and implementation is very challenging.

5 Major Benefits of Household-level Management

Implementing at the household level can:

  • Increase advisor efficiencies
  • Improve outcomes for clients
  • Reduce development cost
  • Provide superior experience to advisor and client
  • Increase AUM

And on top of that – given what we know about how technology can control the outcomes of our clients – it’s really the right thing to do. Can you really say you’re upholding your fiduciary duty if you’re not putting assets in the most tax-advantaged accounts?

If this was being adopted when I was an advisor, it would have changed the game. I would have had a much more controllable strategy to use with my clients. I looked to my firm to provide me with the best tech tools I needed to help advisors succeed. 

Leveraging API’s to Differentiate

A couple of years ago, Morgan Stanley launched WealthDesk to distinguish its wealth management business.

The idea is that it provides one dashboard where advisors can go for all their planning, advice AND implementation tasks – a “one stop shop”.

They were able to accomplish this by taking the “best in class” concept to the next level.

Morgan Stanley partnered with technology companies for planning, risk, tax optimization and more, by using API’s from each of the providers, awarding them the opportunity to focus on the Advisor Experience.

WealthDesk calls the API/engine of these technologies to provide planning, risk advice and tax optimization to meet the needs of the household. It then sends results and calculates “next best actions” to the advisors’ fingertips, in one central location.

Next, the advisor implements the coordinated strategies right from WealthDesk, closing the gap between creation and implementation. The seamless flow of consistent data provides a superior experience for the advisor and improved outcomes for clients.

Morgan Stanley created their own platform, then partnered with best-in-class solutions to facilitate the important capabilities.

Setting Your Firm up for the Next Ten Years

The future of advice is reliant on API’s connecting these financial technologies flawlessly to deliver the benefits highlighted above.

LifeYield has APIs that measure the tax efficiency of each household portfolio and pinpoint the tax-efficient location for every asset in seconds.

Facilitating household management within your current environment could make the difference in attracting the next generation of advisor talent.

Don’t get left behind.

Jeff is the Senior Vice President of Enterprise Sales & Relationships at LifeYield. His deep industry experience makes him an important author to watch. He writes about key industry themes, landmark events and game-changing news that's shaping the future of financial advice.