Arrow Icon
blog header pale blue image blog header abstract shape

Heart of Advice

Insights and best practices for successful financial planning engagement

left arrow Back to All Articles

How Financial Account Aggregators Can Fuel Loyalty

Paul Vieira January 9, 2024

financial account aggregation and advisors

Before financial account aggregators made it simple for advisors to see a big-picture view of their clients’ assets and liabilities, creating a holistic financial plan was a paper chase. Gathering statement after statement and building a snapshot of a client’s finances was laborious, and it was almost immediately out of date once created.

Now a client simply logs in to an advisor-provided account aggregation platform, proves their credentials to link in everything from a mortgage to an investment account, and the financial professional has ongoing insight into the whole landscape of their clients’ financial lives—a game-changing capability that is offered standard in some financial planning platforms.

Aggregation in the Spotlight

2023 was an interesting year for financial data aggregation services. In October, the Consumer Financial Protection Bureau released a proposed rule intended to protect consumers’ data privacy, with a portion specifically aimed at tapering off the use of screen scraping in aggregation platforms in favor of using methods such as APIs and bulk file feeds.1 This is because screen scraping, also known as parsing, involves collecting and storing a client’s credentials and requires a client to enter credentials repeatedly over time to maintain a connection.

Organizations such as the American Bankers Association embraced the proposed rule, saying, “We welcome the contemplated move away from screen scraping, the role of an industry standard-setting body, and the clarification around nonbanks’ obligations to protect consumer privacy.”2

The following month, Mint, a free consumer account aggregation app that had millions of users, announced that it would be shutting down in 2024. Users took to social media to express their angst as competing personal financial management apps, most of which charge fees, swooped in to gain their business.

The unfolding drama underscores how a quality aggregation service can serve as a differentiator for financial planning firms.

Financial Account Aggregation Is “Sticky”

Providing a client with their full financial picture, accessible 24/7 and as up-to-date as they keep it, contributes to a sense of financial security and peace of mind. This capability empowers clients, as evidenced by our 2023 Summit research. Nearly 59 percent of investors strongly agreed that a portal with account aggregation saves time, and 49 percent said it offered a more holistic view of their entire financial picture.3 Another benefit investors noted is the ability to see all accounts in one place, cited by 57 percent of those surveyed.3

Account aggregation tools have varying levels of complexity, from simple tools designed to identify held-away assets and cross-selling opportunities to sophisticated ones that offer full net worth reporting and cash flow tracking. Once a client has become accustomed to a quality account aggregation service, they won’t want to return to multiple logins and a disjointed perspective. Having a “sticky” capability like this helps advisors show their value on an ongoing basis.

Users Gain a Sense of Ownership

Building on the benefit of a personalized financial picture, consider the increased value clients derive from tailoring the information to their needs. This taps into a cognitive bias called the IKEA effect, which leads people to value products they had a hand in creating. Similar to a bookshelf they assembled themselves, clients place a high value on the holistic view they helped put together and feel a sense of ownership over their financial data.

A Secure, Reliable Aggregation Service Is an Advantage

As the CFPB’s proposed rule shows, the industry is moving toward secure and reliable methods for financial data aggregation, including APIs and bulk file feeds. If the aggregation you provide to clients relies on more secure methods and has the latest security features, you’re well-positioned for the future.

The 2023 Kitces Report shows a high level of dissatisfaction with standalone aggregation services despite their high level of adoption.4 It also notes that a large share of advisors access account aggregation via financial planning software instead of a standalone provider.

Enterprises Look for Advisor Gains

Account aggregation is a tech solution that is high on the priority list for enterprises in the financial services industry. A report from Cerulli shows 79 percent of banks surveyed said they were seeking account aggregation services in an effort to boost advisor productivity.5 The 2023 Kitces Report shows 74 percent of advisors have adopted account aggregation technology, making it one of the tech tools with the highest adoption in the industry.4

A portal equipped with robust account aggregation can also unlock opportunities to serve high-net-worth clients, especially multigenerational households. (See how Blue Trust uses account aggregation and a client portal in this case study). Access to a client’s full financial picture empowers you to proactively tailor solutions to their goals to provide an excellent client experience.

Unlocking Opportunities

Account aggregation has transformed from a nice-to-have to a must-have. This technology helps build trust and empower clients

Enterprises see it as a key driver of advisor productivity and client experience. By harnessing the power of a high-quality aggregation platform, you can unlock more opportunities to serve clients well.

 

Sources:

1. Consumer Financial Protection Bureau. “CFPB Proposes Rule to Jumpstart Competition and Accelerate Shift to Open Banking,” October 2023.

2. American Bankers Association. “ABA Statement on CFPB Personal Financial Data Rights (Section 1033) Proposed Rule,” October 2023.

3. eMoney Beyond the Plan Research Study, June 2023, n=1,507.

4. The Kitces Report. “2023 AdvisorTech Study,” August 2023.

5. The Cerulli Report. “U.S. Private Banks & Trust Companies 2021,” October 2021.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

Image of Paul Vieira
About the Author

Paul Vieira is a Senior Enterprise Sales Manager at eMoney Advisor, where he delivers technology solutions supporting our client-led financial planning practice. Paul has over 30 years of technology experience supporting various functions and delivering “best in class” technology solutions to global institutions. This experience includes application development, integrations, process management, product management, product marketing, and most recently delivering a technology solution that supports organizations looking to enhance their digital client journeys.

You may also be interested in...

Two Workflows for the Delivery of an Initial Financial Plan

Implementing workflows in your financial planning firm will ensure that your team delivers a consistent experience to each and every… Read More

Female advisor sharing her financial planning philosophy with a mature female client.

Establishing a Financial Planning Philosophy

Many advisors have a documented investment policy or philosophy—a set of beliefs and principles that guide their investment decision-making process. Read More

financial advisor and client looking at client portal

The Value of a Robust Client Portal in Financial Planning Relationships

A client portal is a client’s connection to their financial plan. It’s the technology that keeps them engaged in between… Read More

eBook: The New Advisor Value Proposition

Download our latest eBook and learn how top advisors are combining Fintech and FinPsych for superior client outcomes.

Download Now

Sign up to have the most popular Heart of Advice posts delivered to your inbox monthly.

Heart of Advice by eMoney Advisors

Welcome to
Heart of Advice

a new source of expert insights for
financial professionals.

Get Started

Tips specific to the eMoney platform can be found in
the eMoney
application, under Help, eMoney Advisor Blog.