Unified Money Platforms Speed Planning, Cut Fees

Consolidating advisory platforms will speed the adoption of financial planning and slice into fees, a new report has found.

A unified advisory platform (UAP) allows financial advisors to manage client accounts from a single portal without having to toggle between different websites, according to researchers at Cerulli Associates.

UAPs will speed the adoption of financial planning and "shift power away from product manufacturers to distributors, and exacerbate fee compression,” said Tom O’Shea, director at Cerulli, in a news release.

Advisors traditionally have had to sign onto one system to manage insurance products, another to track mutual funds, a third to follow positions in stocks and bonds, a fourth to trade exchange-traded funds and a fifth to manage money markets and deposits.

Tracking dozens of accounts through an alphabet soup of platforms has made it hard for advisors to view assets holistically, which a fiduciary era built around planning and the best interest of clients is designed to promote.

Separate platforms have also led to burdensome log-in protocols.

A fractured approach, however, has also meant more fees collected by advisors for managing accounts on disparate platforms.

Consolidation a Priority for Many, but Not All

Giants Merrill Lynch and Morgan Stanley have consolidated platforms into a unified advisory model, Cerulli said.

They aren’t alone.

Cerulli found that 60 percent of companies sponsoring managed accounts said platform consolidation was a priority, Cerulli’s research found.

Wells Fargo Advisors, UBS, Fidelity, Edward Jones, LPL, Charles Schwab, Raymond James and Ameriprise sponsor managed accounts.

Reconfiguring IT systems to consolidate platforms can last anywhere from six months to more than two years.

Not all companies embrace consolidation, the report noted.

Some companies balk at the cost of unifying platforms and other companies say the model doesn’t fit well with an advisor population afforded significant autonomy.

Nearly one in four – 24 percent – of managed account sponsors said they would continue to allow various programs to exist on different platforms, Cerulli found.

An estimated $5.8 trillion in assets were held in managed accounts at the end of last year, Cerulli estimates.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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