April 19, 2012

Data aggregators — a category that includes companies like Open Finance, byallaccounts and Private Client Resources — are emerging to fill the vacuum that opens up when portfolio management systems try to automatically suck up an increasingly large volume of data into client-facing systems. These aggregators, who specialize in taking data from many sources and pushing that data upstream, are increasingly used to provide a turbo boost to the front-end analytics and performance engines that investment managers use every day. By pushing more data into the portfolio analytics systems that asset managers use to make day-to-day investment calls, aggregators help provide that more complete and transparent view that is so vital to smart, timely decisions.

Security and Scalability behind the Scenes

When a building is wired correctly, you don’t notice the cables until the lights don’t come up. Similarly, data aggregation works “inside the walls” of an asset management firm’s existing front-end systems, helping ensure the information is consistent and secure within the portfolio analytics system.

At the same time, data aggregation makes data management more scalable because it eliminates the need for managing numerous investments and pricing data providers, because the aggregator’s toolkit will pullinformation from sources like Schwab, Morningstar and TD Ameritrade to provide a single view of a portfolio.

From Data to Dashboard

Together with a new breed of cloud-based portfolio analytics and performance management solutions, data aggregators are providing an IT solution to a client service problem. Key to these alliances is the ability to turn Big Data insights into a beautiful, dashboard-like view of portfolio performance so that both portfolio managers and their clients get a complete view of a portfolio’s performance and have total confidence in the completeness of the information that underlies the big picture.

I predict that by harnessing the diverse sources and types of information that are helping to fuel the Big Data deluge, aggregation and analytics service provider partnerships will usher in a new approach to asset management — one that is dominated by the kind of transparency which investors rightfully demand, and which investment managers can easily provide.

-Andrew Peddar is CEO, StatPro North America, a global provider of portfolio analytics for the investment community.