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Ian McKenna: Lessons from the US on adviser software integration


One of the things that impressed me most about the recent Technology Tools for Today conference (T3) in Dallas was the extent to which American software suppliers and investment providers are working together to deliver a seamless experience for advisers and their clients.

This all seems to have happened after the industry abandoned the Your Silver Bullet initiative, which tried to facilitate standards for the exchange of data. Although no one actually came out and said it, I get the clear impression that software suppliers all getting together at previous T3 conferences has been a major catalyst to the widespread spirit of collaboration that clearly exists.

A great example of this is the depth of integrations between eMoney Advisor’s emX platform, undoubtedly one of the stars of the show, and other adviser software. At T3 Edmund Walters made a passionate presentation about the commitment by the CEOs of 28 different technology suppliers to build best in class fully integrated bidirectional data feeds between emX Select and other software. This is part of a wider programme where US adviser software suppliers have recognised the importance of building deep integrations that really work between all their systems.

Each organisation is meeting their own costs in building the various integrations, recognising that if their software all works together more effectively they will all sell more licences. As Walters puts it bluntly: “Who cares which system advisers use, let’s make sure they integrate perfectly and it is really bidirectional data using single sign on.”

Walters stated that the CEOs had recognised the importance of enabling advisers to move seamlessly between different systems, making sure they integrate perfectly so advisers can make their own decision on what they consider best of breed for their firms. Its worth watching the YouTube video on this here.

Advisers present were describing this level of integration as “the holy grail”. It is a level of collaboration I have heard UK advisers requesting for many years. Whilst a small number of UK software providers are moving in this direction, what the US suppliers are achieving shows how much is possible.

There can be no doubt detailed integrations of this type deliver significant savings and value to advisers. At F&TRC we recently completed an analysis of the time saving that can be achieved by Simply Biz members if they place investments via the Zurich Investment Platform because of the integration with the support group’s Verbatim offering and Dynamic Planner from Distribution Technology. This can be found here. We are presently in the process of producing similar studies exploring the benefits of other systems and platform integrations.

Such detailed integration is increasingly a key differentiator in UK system selection. There is a clear lesson here to those UK software suppliers who take a protectionist approach and resist collaboration that delivering a truly seamless integration can sell more licences.

American advisers generally benefit from being able to access a far richer stream of data from investment providers and there are a number of specialist software aggregators who facilitate more than just Contract Enquiry type services and Yodlee personal finance feeds.

With the potential pressure to supply detailed information to support “pot follows member” and any extension of the 2013 Regulatory Reform Act, I see a clear case for creating healthy competition in this area rather than risk Government imposing a solution on the industry based on promises from organisations who would like a monopoly mandate.

In America the commitment to deep integration in not limited to software suppliers. Pershing as a global custodian, essentially the US equivalent of a UK platform, operating solely in the business to business space, are equally focused on digitally enabling all elements of their communication with advisers. Director of advisory market technology strategy Patrick Yip highlighted that Pershing are building a global platform which could have significant benefits for UK wealth management firms as well as those in the US, especially firms who operate in multiple jurisdictions.

Reducing the need to manually switch between different systems and the level of data entry is a crucial part of improved efficiency and reducing operational cost. Progress being made in the US clearly demonstrates that this is possible and that UK advisers are right to expect more of software suppliers and platforms in this area.

Understanding the extent of such integrations should be a key criteria for advisers to explore when conducting due diligence as it will significantly impact their own profitability and customer service.

Ian McKenna is director of Finance & Technology Research Centre


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