The combination of the longest bull market on record, fears of recession, and possible election year volatility may be concerning investors ahead of 2020, but it presents a tremendous opportunity for wealth management practices and home offices to demonstrate value, and differentiate themselves, to clients and prospects. However, at the same time, financial advisors are also under pressure to adapt to evolving regulations and meet client expectations regarding fee compression and digital engagement.

An approach that has been gaining traction lately is the idea of “platform consolidation.” By consolidating multiple technology applications and systems into a single, unified platform, firms can reduce operational overhead, lower costs, facilitate scalable growth, and perhaps most importantly, optimize advisors’ ability to construct portfolios based on client goals. Unifying tech silos can also streamline and simplify workflows to monitor regulatory compliance and manage risk. But, while many advisory firms understand the benefits of platform unification, the actual process of implementing this initiative is often perceived as a daunting, complex, and costly undertaking.

Ironically, the goal to provide more options for creating client portfolios has been one of the main drivers for wealth management practices and home offices winding up with so many disparate technology applications. As new investment solutions emerged, technology solutions were developed to enable advisors to harness them for clients. The too-common end result was an advisory firm with many unintegrated “silos”. When technology programs operate separately and independently, portfolio and client management processes ultimately become less flexible overall, as well as slower and more cumbersome to manage.

This also makes it more difficult for advisors to provide clients with a goal-oriented, streamlined, seamless, and personalized experience they have come to expect. The lack of technology platform integration can prevent advisors from delivering holistic, goals-based financial advice in an efficient, real-time, and comprehensive manner.  

Optimizing Your Tech Stack

With these shifting client expectations, an increasing number of firms are seeking to unify their technology applications to generate the efficiencies and enable meaningful capabilities and client engagement to make such a business model possible for financial advisors.

When an advisor’s front, middle, and back offices are all connected via a single tech platform, all workflows encompassing the implementation and execution of investment decisions are shortened and simplified, and advisor actions and guidance can be comprehensively reported to clients in real time. In addition, myriad home office functions – including overlay portfolio management, back office operations, and compliance oversight – are streamlined and made more efficient.

According to Celent, firms that implement conversions to a unified technology platform are generally seeking to cut operational costs by at least 20 percent. That’s a tall order, but in our experience, we have found this objective can be met if firms ensure their integrated system achieve certain characteristics:

• A cohesive, streamlined end-to-end solution that fully integrates front-, middle-, and back-office operations as well as data and workflows along the entire portfolio lifecycle for all advisory programs. 

• The capability to scale in order to accommodate long-term future growth.

• An open-architecture platform that is product-agnostic.

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