Account Aggregation Panel Weighs Benefits


Let's face it, clients forget things. They forget to turn in documents. They forget their account numbers. Sometimes they even forget about bank accounts they opened eons ago in cities far, far away.

Industry estimates show the typical advisor manages 30 to 40 percent of their clients' assets. Those who are trying to help their clients keep their ducks in a row can't do so completely without knowing about the rest of their assets.

That's where account aggregation can help.

Partner Insights

When accountants have permission to access all of their clients' accounts-bank statements, 401(k)s, mortgages and loans, to name a few-they can get a big picture understanding and provide better advice.

Account aggregation vendor CashEdge presented a panel of four financial advisors at its recent user conference in New York to discuss the benefits and challenges associated with using such tools.

Convincing Clients

Even CashEdge executives admit that clients remain concerned about security issues with all their passwords residing in cyberspace. But the vendor explains that it and other companies take advantage of the same encryption technologies and safeguards that large financial institutions use.

"You're giving your financial advisor tons of information anyway," says Tom Roberts, senior vice president and general manager of wealth management for CashEdge. It is the advisor's job to get clients comfortable providing information, he says.

Panelists convince clients in different ways.

Greg Lebold of Legacy Wealth Management doesn't give people a choice.

"If you're going to be a management client, we're going to aggregate your accounts, that's part of the introductory meeting," Lebold says of his Kansas City, Mo.-based firm. "I don't know of anyone who didn't do business with me because of that."

Joe Carbone of Cbiz Wealth Management lets his clients decide. If they don't want to provide their usernames and passwords, Cbiz issues its own and tries to convince them to aggregate the information in a different way.

"If they say no, we're still going to try to move it over," Carbone says.

United Planners, a small New Jersey company, started teaching people how to pay for their children's college and transitioned into helping them plan for retirement.

Only about a dozen of its clients are using aggregation services because the company selects who it puts on CashEdge based on potential benefits.

"How large is the client? How available is their data going to be? What's the perceived value to the client," says Ray Loewe of United Planners. "If they think it's going to be wonderful, start doing it."

Providing Better Advice

Loewe gave one of the most colorful examples of how account aggregation helped him provide better advice and bring more assets under management at his company.

One of his friends/clients, Chuck, is an architect at a $20 million firm. Last year, Chuck wanted to accumulate $1 million in cash. Loewe knew Chuck had accomplished that goal, though he was not necessarily storing the money under Loewe, because he had access to Chuck's other accounts.

The two were having drinks and Chuck started complaining that he was placed on a three-year waiting list for a hot car he wanted. Loewe pulled some strings and got him a $180,000 car with a $30,000 premium two weeks later.

"That little job cemented the client relationship and he didn't take any of my money with him," Loewe says. "We started a trust to give money to charity we had his kids run and it was easy to manage because we knew where his money was."

Another panelist pointed to the ability to search for multiple clients with money invested in a particular fund and email or call all of them to warn them of risky scenarios, instead of having to log into each client's individual account to check their status.

One benefit Lebold enjoys is the ability to charge his clients for held-away assets such as self-directed 401 (k) plans at Charles Schwab.

"One guy's brother-in-law is an Edward Jones rep, but he doesn't trust the advice he's getting, so he pays me once a year to oversee his Ed Jones account," Lebold says. "I charge 35 to 40 basis points (.35 to .45 percent) depending on what value I think I can bring to the table."

Alexandra DeFelice is Associate Editor of Accounting Technology and can be reached at

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