By Ryan Neal
Originally published by Financial Planning
While advisors now have reams of data at their fingertips, turning it into meaningful, useful information has long been a pain point. This means planners can’t identify growth opportunities and slows growth. However, tech vendors are finally delivering some solutions.
Turnkey asset management platform Envestnet, for one, recently unveiled Insights Solutions, a new suite of application programming interfaces to help financial institutions and fintechs take advantage of the consumer spending data collected by Yodlee. Firms can use these APIs to show clients personalized information about their spending and alert advisors about new opportunities.
“What we want to do is change the conversations advisors have with their clients,” says Brandon Rembe, senior vice president of product at Envestnet Yodlee. “Rather than it be reactive, we want it to be proactive.”
For example, if Yodlee detects new income indicating a job change, an API in Insights Solutions can alert the advisor to reach out to the client about 401(k) rollovers, says Rembe. Or if a client’s insurance premiums increase, advisors can use Envestnet’s Insurance Exchange to find an alternative.
Firms can use Yodlee’s APIs to build personal finance apps consumers could use even before opening an account, a strategy deployed by digital advice firm Personal Capital and, more recently, Fidelity Investments with its Spire app. If prospects become clients, budgeting apps provide more ongoing digital engagement than a basic client portal, Rembe says.
“You might have a customer login to a portal every month, every quarter, but these are tools they can use every day,” he adds.
Insights Solutions comes on the heels of Envestnet adding new data analytics to its MoneyGuide financial planning software, which chief growth officer Kevin Hughes says will help surface hidden opportunities for advisors.
Envestnet isn’t the only technology provider trying to make data analytics more useful. Fiserv recently partnered with Syntellis Performance Solutions on a planning and analysis service to help financial institutions better manage enterprise financial planning real-time budgeting, forecasting and profitability analysis.
“Financial institutions need real-time access to accurate forecasting and budgeting data to effectively respond to rapidly changing market conditions,” Aldor Delp, Fiserv’s general manager of the Digital Efficiency Group at Fiserv, said in a statement.
Firms specializing in data are also looking for new ways to get in front of financial advisors. Refinitiv acquired Advisor Software to expand the capabilities of its API suite, Digital Investor. And Plaid, which Visa acquired for $5 billion, is expanding beyond account aggregation with its own collection of wealth management APIs.
Rembe attributes the trend to technology and data science finally reaching a point where data collectors can make the information meaningful for banks, advisors and fintechs. In the past, data was mostly limited to historical analysis.
“Technology has caught up so that it can be run in real-time,” Rembe says.
This also allows advisors to offer more personalized financial advice to each client, he says. For example, advisors can show how granular activities like vacation spending or purchases in mobile apps are impacting a financial plan.
“It’s changing the way that consumers and advisors are able to look, interpret and get insights from the consumer’s data,” Rembe says. “All of those things become actionable to investors and advisors.”
