Over the past few years, data aggregation solutions have become a key component of how RIA firms deliver better client service, provide holistic wealth management, and boost AUM and profits. But what’s been less well publicized—and what I’d like to talk about here—is how top custodians are now using aggregation services to deliver data to their RIA clients. In doing so, they’re providing their RIA clients with better service and turning the typical data delivery model on its head.
A top custodian may have 500 RIA firms as clients, all using different portfolio management systems. For every Schwab or Advent system that the RIAs are using, there’s also a proprietary system that makes it more difficult for the custodian to deliver data.
Today’s custodians can perhaps support two or three of the bigger portfolio management systems (PMS), but the idea of efficiently delivering data to dozens or hundreds of disparate systems is mind boggling from both an operational and cost perspective. The custodian ends up sending data in a format that the RIA is ill-equipped to receive.
That’s where more effective data delivery comes in. Today, an increasing number of leading custodians are using a data aggregator such as my firm to deliver data to a vast array of RIAs with disparate portfolio management systems. Data aggregation makes data delivery to the disparate systems as seamless as possible so the custodian is freed from trying to service a seemingly infinite number of iterations and permutations of today’s PMS offerings.
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