A handful of data analysis and account aggregation tools for advisers have come to market, highlighting how new technologies are being developed to make advisers more competitive with personal financial management websites such as Personal Capital and Mint.com.
As investors demand the ability to view their aggregated assets online, sophisticated data analytic platforms are getting more attention from advisers. Tech providers such as Scivantage and Wealth Access are working on products that advisory firms can use to differentiate themselves online, retain high-net-worth clients and attract Gen X and Y assets.
Scivantage has launched a platform called
Sqope, which uses data mining and a crowd-sourced analytics tool called “People Like You” to show online users how their investments compare to those of like-minded investors in terms of age, gender, asset class, wealth and investment interests.
“We expected there would be more interest in the retail space, but we've found the advisers are extremely interested in this, said Scivantage executive vice president Cameron Routh. “This is more of an enhancement than a threat. This is a tool that helps advisers compete with robo advisers.”
Although Sqope isn't an aggregation tool, it is built to accept held-away assets and can be integrated with account aggregation products, according to Scivantage officials.
Currently, Sqope is sold to brokerage firms, with advisers granted access by their firms. Scivantage has plans to release a Sqope product specific to independent advisers in 2015, which will include a feature allowing a comparison of performance data against other advisory firms.
Fees for the service were not available.
TARGETING NEXT GEN INVESTORS
Mr. Routh said the firm developed Sqope to help brokers target next-generation investors who bring a different mindset to wealth management, which includes an interest in online data and the ability to do their own trading.
“A firm that allows investors to trade themselves, and provides analytics and advisory services, can help determine when self-directed investors are underperforming or sitting on cash,” Mr. Routh said. “Those are warning signs that brokers need to know, and they will offer advisory services to investors.”
An E* Trade tracking study of 900 investors who are experienced with self-directed online platforms, found that the majority control investment portfolios with assets ranging from $100,000 to more than $1 million. Their primary reasons for investing online include a desire to know what's going on with their money, take control and develop their trading skills.
Another online offering,
Wealth Access, provides reporting and aggregation features that let advisers tap into 20,000 data feeds from financial institutions for a complete view of their high-net-worth clients' assets and liabilities, said Tim Welsh, president of wealth management consulting firm Nexus Strategy. Mr. Welsh is a marketing strategy consultant for Wealth Access.
The product is designed to help advisers track money moves, rebalance portfolios and share data with clients' accountants and attorneys, Mr. Welsh said.
Wealth Access reports on $7 billion in client assets and currently adds an additional $600 million per month, up from $250 million per month in 2013, according to the company.
“Advisers can provide the best of Mint.com to their clients. It's much more complicated for the high net worth to do account aggregation,” Mr. Welsh said. “Account aggregation for high-net-worth clients is a new category that advisers are adopting. The investor mindset has changed, and investors are much more interested in pulling in data.”
Wealth Access charges advisers a $6,000 annual fee to use the platform for up to 300 client accounts and the cost beyond that number is pro-rated and negotiated, according to Mr. Welsh. He said the platform is more robust than
Mint.com or other aggregation platforms because more than half of the assets reported come not from custodians but from held-away assets such as hedge funds, limited partnerships, alternative investments, trusts and estates.
NO INVESTMENT ADVICE
Sophie Schmitt, a senior analyst with financial services research firm Aite Group, said that both the Wealth Access and Sqope platforms provide massive amounts of performance data about end investors' data, but without providing investment advice.
“Wealth Access doesn't give advice. It's almost like a Mint.com for the high net worth and ultra-high net worth,” Ms. Schmitt said. “They allow you to aggregate bank and other investment accounts and even alternative assets, and they provide unique insight into the portfolio. They show bonds by maturity, for example. You can't get that on Mint. It's an extension of the adviser's practice.”
As for Scivantage's Sqope product, Ms. Schmitt said she has never seen anything that compares to the “People Like You” feature, which she believes is built to appeal to younger investors who spend a lot of time online.
“This type of performance reporting is typically not yet available on client-facing portals at many established wealth management firms,” she said. “People are spending more time online than ever before, and they want access to information. To attract the next generation client, you need online tools that will give them the control and insight they're looking for. They're not going to wait around for their quarterly report.”
