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Holistic Wealth Management: The Data Consolidation Challenge

Providing holistic advice and investment management based on a 360° client view is only a vision for many advisors, and often requires a large amount of manual data collection and consolidation, taking away valuable time the advisor could be spending with the client. Fortunately, a number of service providers exist that can alleviate the challenges that data consolidation creates.

A new Impact Report from Aite Group, LLC reveals that 26% of advisors distributing products from multiple providers are not happy with their current data consolidation approach, and plan to make changes over the course of the next one to two years. Fuelled by industry trends toward open product architecture, and wealth management firms' increased focus on distribution (rather than product manufacturing or asset servicing), the consolidation of client account data has become more important than ever.

The report, titled "Holistic Wealth Management: The Data Consolidation Challenge," indicates that providing holistic advice and investment management requires a robust data consolidation infrastructure. There are a large number of service providers in the data consolidation space, and their value propositions and capabilities vary greatly, which makes finding the right data consolidation approach and partner a difficult undertaking. Still, given that such a large number of advisors are looking to make changes to their current setup, meeting the needs of these advisors represents a great opportunity for providers of data consolidation services to increase market share.

"An advisor who has the ability to look beyond the product level and discuss client matters on a holistic scale will be able to become a trusted advisor to the client, which ultimately will lead to an increased wallet share," says Alois Pirker, a senior analyst with Aite Group and author of this report. "This holistic wealth management approach, however, will remain a mere vision unless the advisor receives consolidated client data that is up to date and of high-quality."
The report outlines the concept of holistic wealth management, discusses the requirements for consolidated data, and provides a categorization of data consolidation vendors. It also presents the findings of a survey of registered investment advisors, focusing on the current use of data consolidation, and the satisfaction level with current solution approaches.