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Financial Planning > Behavioral Finance

Producers Eye Account Aggregation As Key To Service Philosophy

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Online account aggregation is rapidly maturing as a strategy for financial representatives to grow their businesses. Many technology solutions are available, and each aims to help producers and their clients view all of a client’s financial information in one place.

Insurance coverages? Check. Bank accounts? Check. Retirement plans? Mortgages? Frequent flyer miles? Check, check and check.

Such technology tools have been available in major banks, but customers have shown little interest in using them. The public’s tepid reaction stems from a desire for more than just information or a sophisticated technology tool. People need help sorting through their complete financial picture.

Americans haven’t been too impressed with the account aggregation tools currently available to them through many of the nation’s leading banks. Several banks have scrapped their aggregation services in recent months because no one was logging on. But, that doesn’t mean the concept has failed.

Consumers are jaded by fancy technology tools that do nothing more than let them track information. They’re not clamoring for the ability to check their retirement balances at 4:29 a.m. while on vacation in Fiji. But, they still want a single source of reference for all of their financial affairs. And that means — as it has always meant — finding a trusted financial representative to walk them through the big picture.

As account aggregation technology becomes more sophisticated, financial representatives are harnessing it to grow their practices. They’re using it to keep tabs on client goals, cross-sell and up-sell products, and boost client confidence.

Of the $800 million that financial services firms spent on information technology for wealth management in 2004, $104 million was for account aggregation tools, according to research from Celent LLC. That figure is expected to leap by 8-9% each year.

Information is valuable only when it can be translated into action. Producers seek comprehensive, up-to-the-minute financial information at their fingertips not because they want to impress clients with technological wizardry, but because they want to provide better recommendations and service.

Suppose one of your clients stumbles on a real estate investment opportunity and wants to know how he might fund it. A good aggregation tool serves as a ready resource that gives you and your client an instant snapshot of his current financial situation and points to potential sources of cash. You won’t need to ask how much his home is worth, how much his mortgage payment is, or how much he’s been able to squirrel away in savings. You can get right down to planning his next financial move.

Believing in the power of account aggregation to revolutionize the financial representative-client relationship, The Guardian Life Insurance Company of America provides a tool called The Living Balance Sheet to its field force. The tool tracks four financial domains: protection, assets, liabilities, and cash flow.

According to producers, financial aggregation tools not only help financial representatives get new business, but also helps them to serve more customers by cutting down on data entry and fact-finding time.

The initial set-up of account aggregation is a task for both financial representatives and clients. It can take a few hours — and maybe even a couple of sessions — to gather and enter all the information required. But once the initial data entry is done, it’s easy to get a snapshot view of a client’s finances anytime, anywhere.

Aggregation technology has spurred clients to view their finances with more immediacy — so much so, that they’re far less likely to delay the fact-finding process. When they can see all of their accounts in a central location, it often gives clients confidence when they are on the right track and encouragement when it’s time to make an adjustment.

Clarity is another important benefit of advanced aggregation tools. Producers who use the tools remark that customers often encounter surprises upon entering their financial records in the system. Assets that sometimes fall off the radar screen, such as 401(k) accounts from previous employers, will re-emerge. And once found, they stay in sight and can be directed to best maximize their value.

Account aggregation gives clients better access and more control over their financial affairs. The best tools provide access to an online “vault” where clients can keep electronic copies of critical policies and documents. A Fiji tourist’s mind may be 10,000 miles away from retirement planning, but she will scramble for an Internet connection when she realizes she’s lost her passport. Her secure personal website provided by her financial representative can provide a copy she can use to get a temporary visa.

Employed effectively, aggregation tools will continue to strengthen the producer-client relationship and help foster financial peace of mind for everyone.

Bob Ball is a former general agent and currently a special consultant for the development of Guardian Life Insurance Company of America’s Living Balance Sheet proprietary system. He can be reached at . Kathy Readinger is a second vice president of marketing, technology and product services for the individual markets profit center with The Guardian. Ms. Readinger can be reached at .


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