Independent advisors are overwhelmed with tech options. One of the most significant challenges for RIAs is the combination of solutions provided by multiple vendors on their platforms, according to a Cerulli study.
Not all vendors function well together and technology stacks can vary widely by firm, depending on size, types of clients and needs, according to Jon Patullo, managing director at TD Ameritrade. “Sometimes working with advisors is a little bit like herding cats,” he says. “Everyone does things a little bit differently.”
But, mounting partnerships between financial technology firms have made advisor decisions — and day-to-day operations — a little easier. The integrations attempt to streamline a complex web of choices into one integrated platform, meaning one less headache for independent advisors.
“All firms have been working towards building out these integrations to really drive value to the advisors, so it’s mutually beneficial,” says Dirk Pearson, president of client services Advyzon, a practice management platform that partners with companies like MoneyGuidePro, Right Capital and Kwanti.
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Advyzon’s most recent integration is with Riskalyze. Advisors can access both accounts through a single sign-on and can see risk numbers directly on the Advyzon client-account page, according to the firm. “Improving advisor experience and streamlining the client workflow is something that both firms have shared as an objective,” Riskalyze CEO Aaron Klein said in a statement.
But it’s not just fintechs that are pairing up. Earlier this month the robo advisor Marstone
Custodians are also providing tools to help advisors understand how different vendors will function on the their platforms. “We have an
Advisors can input the software they use to identify other tools that work best with the technology they already have.
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Another draw to integration: Cybersecurity. Putting together vendors piecemeal can heighten risk, according to Cerulli. “As third parties continue to evaluate new services to provide RIAs, they must plan for RIA’s due diligence concerns to increase significantly,” the digital tool study says.
For fintechs like Advyzon that aren’t looking to expand their own service into a new sector, integration works well for all parties involved.
“From a vendor to vendor perspective, a lot of us have our own strengths,” Pearson says. “That’s where we look to each other to partner together.”
