Getting ROI from Account Aggregation in Two Basic Steps


Account aggregation costs money. And is not “necessary” to run a basic financial advisory business. So why do advisors bother with it? For the same reason that anyone takes action: the pros outweigh the cons. There’s a positive ROI. Let’s look at how advisors are making the cost of account aggregation “worth it” and how you can, too.

account aggregation

Price can and should be a concern.

The truth is some account aggregation can be expensive. With some vendors charging as much as $60 per account per year, the cost of account aggregation can add up quickly.

While Blueleaf doesn’t price this way, let’s use our average customer’s data to think this through. The average client on the platform has more than 6 held-away accounts. The average advisor has over 100 clients. So let’s do the math… 6 x 100 = 600 x $60 = YIKES, $36,000 to cover just one advisor’s clients.

We could show you all kinds of ROI arguments that prove beyond any doubt that the investment would payoff, but that kind of investment isn’t likely to be in your budget.

The fix here is partly obvious.

1) Find a reasonably priced service.

There are a number of services that charge by the client with no limit on the number of accounts per client (Blueleaf’s pricing does this). There are also other pricing models that can keep costs out of the insane zone. Another way to get more value is by choosing one of the account aggregation systems that are built into a larger system. For example if you choose to use a system like Blueleaf you get account aggregation at no additional charge along side a client portal, performance reporting and document sharing. Packaging is a great way to avoid over-paying.

Related: 15 Things to Consider When Shopping for Account Aggregation

2) Get compensated for your work.

Get return value from your account aggregation by making certain that you are not just giving away advice on held-away accounts without something of value in return, like capturing rollover assets and/or creating an additional revenue stream for your firm.

Capturing Assets: Some advisors choose not to bill on held-away accounts because they view it as a strategic give away. That can be a smart strategy that will help you capture roll-over assets and other assets on the move. By offering advice on held-away accounts, you increase the likelihood that clients will rollover assets to you when they are eligible. This is an easy way to increase your AUM without having to add new clients.

Billing on Held-Away Assets: Many advisors don’t bill on held-away assets because they don’t know how. It may seem too complicated, or they simply don’t have the time to figure out the logistical/operational steps they need to take. Worse, many advisors don’t think clients will see the value and pay. With almost ½ of RIAs charging for this kind of service, the evidence suggests otherwise.

If you want to bill on held-away assets, think about the advice you provide for what it is: an additional service offering. Like all your other services you should be compensated, with most advisors charging between 25-40 basis points for this service. Keep in mind that advising on held-away accounts typically involves additional research, recommendations and often rebalancing instructions.

By advising on held-away accounts you create additional value for your clients while creating an additional revenue stream for your firm. One additional thing that can make billing on held-away assets much simpler is to make certain the system has a billing system that can deal with held-away accounts, like Blueleaf does.

After price, there are two other main challenges some face with their account aggregation provider: complexity and risk (compliance, custody, error). Read more about these challenges and how to deal with them in the Free Guide: How Account Aggregation Can Lead You To Heaven, or Trap You In Hell. 

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Carolyn is Blueleaf’s in-house marketing guru. She writes on The Blueleaf Blog to make advisors’ lives easier, offering practice management and client engagement tips where and when they’re useful. Outside of the Blueleaf offices, she can be found running a 10k or cooking her famous chili. Chat LIVE with Carolyn on Twitter @BlueleafAdvisor!
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