Data Consolidation Can Help Financial Advisers Gain Client Trust

Data consolidation is at the heart of the new wealth management business model as firms embrace the concept of unified managed households, argues Aite Group in a new vendor study. With wealthy individuals employing the services of multiple financial advisers, becoming the most-trusted adviser now requires a comprehensive picture of the client. As a result, now more than ever wealth managers must be able to consolidate data to be able to provide services such as performance reporting, client-level tax management, billing and holistic advice, the Boston-based consultancy asserts.

According to the report, solutions providers have splintered into two distinct camps. Managed data services focus specifically on data acquisition and mapping. These solutions typically are hosted and operated by the vendor, but large financial institutions have an eye toward integrating these solutions into the firm's infrastructure, notes Aite.

Also available are complete data management platforms, which feature built-in applications to leverage consolidated data. These solutions offer a multitude of functionality, including portfolio accounting, portfolio measurement and client reporting, and they typically integrate into other third-party financial planning and customer relationship management solutions, Aite says, adding that these kinds of all-in-one systems tend to be well-suited for small and midsize firms due to systems' comprehensive functional footprints.