The first step is normalizing, rationalizing and organizing internal data. The key is "to create a compelling adviser experience, based on some sort of workflow, and to make them feel like they're interacting with one application, not 15," Capgemini's Sion asserts.
"There are all sorts of opportunities to get this wrong," cautions UBS' Jones, who focuses on two client segments: the affluent, with $100,000 to $1 million in assets, and the high-net-worth, with $1 million to $10 million in assets, all held at UBS. The integrity of company data and how it is classified are critical issues to resolve.
According to Stuart Tarmy, director of marketing at StatementOne, a Web-based portfolio accounting and performance-reporting provider in Lawrenceville, N.J., data integrity is an industrywide problem. He reports that financial data often experiences error rates as high as 10 to 20 percent.
Firms are "still in the process of getting their internal house in order," points out Financial Insights' Lively. "You want to feel like you've got that up and running before you figure out how to pipe in external data," he adds.
The human factor may add further frustration to the quest for what many term the Holy Grail in financial services. "People may be skeptical about putting all their eggs in one basket," Lively notes. "The value the consumer sees may not be as clear as we in the industry think [it is]."
The flip side of this conundrum is that, even if you build a better desktop, the advisers may not come. Still, an ever-increasing number and variety of financial-services providers are betting otherwise.
"We got feedback from reps in the field that this is where our business is going," explains Mike Zebrowski, assistant vice president at MML Investor Services in Springfield, Mass. Zebrowski manages some of the technology tools used by the 5,000 registered reps at MML, a subsidiary of MassMutual Financial Group.
All For One
Coping with internal data and recalcitrant humans are not the only frustrations in this massive industrywide effort. Legal, privacy and compliance challenges need to be addressed as well. Privacy laws are going to become more onerous, warns Jeff Torchon, who is responsible for all Web strategy and implementation in the United States and Europe at San Francisco-based Barclays Global Investors (BGI).
UBS' Jones agrees. "There are huge privacy issues [around] data on assets coming in from elsewhere," he says.
Finally, even if a company has its internal house in order, aggregating external data brings its own technology challenges. Vendor products are still in development and a workable enterprisewide solution may be internal, outsourced or a hybrid of the two.
At MassMutual, for example, two vendors have knit together a solution that consolidates internal data and pipes in external data to the adviser desktop. Even so, data maintenance is an ongoing headache, reports MML's Zebrowski. New, unclassified assets, a new investment strategy or investment alternatives like hedge funds elude today's state-of-the-art aggregation tools. So, for many of the largest firms, manual input is still the way to go.
At UBS, "We do not use automated aggregation," explains the firm's Jones. "You have a lot of internal and external software that does pieces. There are a couple of outside vendors, but they're small, and it's a huge risk for a firm our size," he adds.
UBS does allow clients to put in assets through their adviser online service. Clients can also pay for a master custody service from Advent Software that allows them to aggregate their assets on their own desktops. And the firm outsources a financial planning software tool that allows advisers to view all assets and liabilities, both those held internally and at other institutions, on the adviser workstation.
So, how will advisers achieve an automated holistic view of client data? "It's never going to be easy," says BGI's Torchon. The idea of sharing account information "requires a lot of cooperation between a lot of large IT shops, and their IT standards and IT practices." And, he concludes, "There will always be someone in the chain for whom it's not in their best interest to share."