6 reasons why account aggregation is necessary for financial planning

Let’s discuss how account aggregation is helping many advisors gain efficiencies for creating financial plans. Here are six reasons account aggregation may be an answer for you.

What a unique time we live in. Client expectations for your time has at the very least stayed the same, if not increased, but you are feeling the pressure of fee compression daily. They ask to provide the same level of service, while having the pressure to reduce fees just to compete, can be a difficult one.

There is certainly no silver bullet to solve this conundrum. One solution may work for one advisor and may not for another. Let’s discuss how account aggregation is helping many advisors gain efficiencies for creating financial plans.

Here are six reasons account aggregation may be an answer for you.


Aggregation can create client “stickiness”

Sometimes when we discuss “efficiency” we forget about our client. The great thing about account aggregation is that your client portal becomes the place for your client to get a picture of their entire financial situation. Your site becomes a place they want to visit. According to Payments Journal, the average person has over 5 different institutions they are doing business with financially. This only grows when we consider debt instruments and insurance products.


You can focus on operational efficiencies

In a world where automation is so prevalent, financial planning seems to be one of the places where data entry is considered mandatory. When in reality, it should be more about data validation, not entry. A well-utilized account aggregation engine should populate most of the information to your system so you can create a financial plan.

Account aggregation is not always perfect, but validating the information and needing to recategorize an account or two, is far more efficient than entering every account and updating that information for each meeting. This information is provided by the respective financial institution and does not always go exactly where you want it to go. A simple reclassification of the item will get you on your way to creating an accurate plan for your client.


Always keep up-to-date information on accounts

Accounts linked to account aggregation can be updated as often as every four hours. This means not worrying about the most recent information or worrying about forgotten quarterly statements. Your client simply passes their login information for the respective account through the client portal, and with the click of a button, you get the most up-to-date information. If security is something you are worried about, keep in mind, the financial institution’s security protocols control the accessibility to the account. Account aggregation only passes balance and transaction history. That is why the client may have to go in and re-establish connections to some accounts more than others. The client will still need to log into that separately to complete that function to transact on that account.


Prospecting can get easier

We hear from many advisors that today’s busy climate makes their time truly precious. The statement “you only get one chance to make a good first impression” is really holding truer today than it ever has. We have the largest generational transfer of wealth occurring right now. Yet, advisors are unsure if that money will stay on their books, or if they will even get to compete for that relationship. If they do get to compete, they may only get one shot. Imagine being able to quickly gather the necessary data so you can spend time discussing their goals and forming a plan vs asking them for statements and files from many sources.


Get your time back

Whether you are trying to grow your book of business, retain the book you have already worked so hard to build, or just trying to get enough time in your day to get home in time for dinner, the potential efficiencies gained with account aggregation could help you accomplish these goals or others.


Beneficial for both you and your clients

Let me end where I began. Account aggregation is certainly not the be-all and end-all to creating the maximum efficiency for your day, but we do believe it is an easy way to move the needle in the right direction. A tool that not only has benefits for you but your clients.  Not all tools allow for wins for both the advisor and the client. This is one of those tools.


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