For Advisor Satisfaction, Financial Planning Tools Must Play Nice with the Entire Tech Stack

October 5, 2023 — Boston

Application programming interfaces (APIs) that enable seamless transmission of data within the wealth stack are becoming increasingly important

As financial planning increasingly becomes the core element upon which investment advice, tax planning, and estate planning is based, it is critical that financial planning tools seamlessly integrate with other elements of the wealth management technology stack, according to the latest Cerulli Edge—U.S. Asset and Wealth Management Edition.

To operate as effectively as possible, financial advisors require a robust integration between their planning software and their clients’ portfolio data, tax data, document repository, and client portal. Despite this requirement, home-office technology executives most frequently identify a lack of integration with other technology tools as the element of their financial planning software tool with which they are least satisfied.

Wealth management service delivery models are increasingly reliant on technology and the integration tools that provide seamless, accurate delivery of data, yet legacy platforms are often behind, lacking the ability to support data transfer between other applications in the tech stack. “As financial planning tools become a central component of advisors’ core offering, developing robust APIs that pull data from front-, middle-, and back-office applications that support fast, accurate data transfer will be critical,” says Mike Rose, director.

More broadly, Cerulli believes the value financial planning applications have provided to the core service offerings of financial advisor practices will fuel market opportunity. During the past five years, many of the most widely adopted financial planning vendors have been acquired by a wide range of financial services organizations, including turnkey asset management platforms (TAMPs), registered investment advisor (RIA) custodians, and other wealth management technology providers.

Looking ahead, Cerulli expects the acquisition of financial planning software providers to continue, as TAMPs and other technology providers expand the breadth of their service offerings to support clients’ investing goals and complement their own platforms.

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