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United, We Stand

A consolidated view of clients' holdings may be the Holy Grail of investment management, but is Wall Street ready?

Integrating client account information from disparate data sources is the biggest technology challenge facing wealth managers today, according to a study published in June by the Financial Planning Association in conjunction with Pyramid, a Forest Hills, N.Y.-based research firm.

The ability to easily access one consolidated view of a client's assets has been at the top of every financial adviser's wish list for years. But, though the technology to do so is available, says Shaw Lively, a research analyst at Financial Insights in Framingham, Mass., the question is, Are we ready for it?

"For most firms, the adviser desktop is just a mess," relates Alex Sion, a Capgemini consultant based in New York.

"To date, few firms have the complete adviser dashboard sorted out," confirms Pamela Brewster, senior analyst at Celent Communications in Boston, in her North American Wealth Management survey released in June. "Rather, most firms start with a number of existing applications, such as financial planning software or asset allocation applications, and are now looking at ways to integrate these applications within a broader wealth management platform."

A major factor driving the increased interest in enhanced adviser workstations is the tectonic shift in how the wealthy are sold investment products. As regional and national brokerage firms transition from their old-school, transaction-based sales model to a fee-based advisory offering wealth management services, their IT departments are scrambling to keep up.

Money Talks

Last year, there was a 14 percent annual increase in high-net-worth individuals in the United States - those with over $1 million in financial assets - to 2.27 million people, reports the 2004 World Wealth Report, underwritten by Merrill Lynch and Capgemini. And Celent research suggests that asset management fees generated by the high-net-worth segment will continue to grow by 7.5 percent annually, from $68 billion in 2003 to $93 billion by 2007. But, what will it take to get truly functional - and well-accepted - wealth-management tools on advisers' desktops?

John Wellington believes he knows firsthand. "We're a long way from done, but we're way ahead," says the director of wealth management and advisory services at The Advest Group, a Hartford-based, 525-adviser, regional brokerage firm, about Advest's five-year effort to move into wealth management. Starting with a decision made in 1999 to train key advisers in financial planning at a Harvard-based program, Wellington oversaw the technology rollout that would support broker transformation to financial planning and wealth management.

"There's no single application that I'm aware of that can handle all aspects of the wealth management space," Wellington notes. A key difficulty with data management is that the assortment of firms crowding into this space - trust banks, insurance companies, traditional brokerage firms and family offices - each defines wealth management differently. "A consortium needs to come together ... to build a universal interface," Wellington says. Whether this will happen remains an open question.

One Thing at a Time

In the meantime, bringing features and functions to the adviser desktop seems to require a phased process. "Today, there are very few soup-to-nuts applications that enable a financial adviser to take a holistic view in a seamless way," says Eric Jones, director of wealth management services in the technology group at UBS in New York.

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