Integration has to mean something.
The word “integration” is so commonly uttered by technology providers and writers that it’s become the corner square on the fintech BINGO board, but they describe something incredibly important to advisor technology said Glenn Elliott, CEO & Co-Founder of Practifi, because today a coherent, comprehensive set of integrations are key to improving and scaling a wealth management business.
“Integrations have become a ubiquitous desire in wealth management,” said Elliott. “Everyone who has been in the industry for some time has suffered the same problems. When you manage information but the client information is fragmented, it becomes a poorer experience for your client because you cannot service them effectively. It takes longer than it should. It requires more resources than it should. It’s costlier and more error-prone.”
“It’s interesting that the wealth industry has put up with so much for so long.”
Getting data flowing between platforms is difficult to engineer, said Elliott, because until recently, deep integrations were often an expression of the values of a particular technology provider—companies oriented towards openness tended to build platforms ready-made to connect to other technology. He likens an integration to a bridge between different pieces of software.
“Building an integration starts with the end of that bridge. You can’t start in the middle,” said Elliott. “What today’s best technology platforms are doing increasingly well is getting their end of the bridge in great shape. Historically this hasn’t always been the case. The bast platforms are doing a good job of standardizing the bridge to integration, and it’s all being done through APIs.”
Today’s software providers have even moved a step further, launching some products as APIs only, intended to plug into and augment an advisor’s existing technology stack but not existing as a standalone entity.
Elliott said that APIs are simply an on-ramp or approach span to integration: a gateway for one piece of technology to communicate with another, just like a user interface is a gateway for a person to talk to a computer.
“This used to be something that was just an add-on, and that caused problems in the industry,” he said. “We saw wealthtech platforms bolt on their APIs, and that didn’t work well. It was hard to set up and the integrations were not frequently updated.”
“Best-of-breed technology” now means that platforms take their API as seriously as they do their user experience, said Elliott.
Technology is just beginning to mine the power of deep integrations. Elliott explained that basic integrations allowed for information from a client’s portfolio to be displayed in a CRM, or information from the CRM to be displayed in a portfolio management tool.
Deep integrations, on the other hand, take the data from CRM and a client’s portfolio and synthesize workflows, analytics and notifications for advisors.
“The destinations with some of these possibilities are predictive notifications that can say, across your clients’ accounts, we’ve interrogated all of their portfolios on a routine basis and identified a cohort of three of your platinum-level clients whose portfolios have fallen behind an index in the last three months, and you’re also behind on your productivity and on tasks with your client services team,” said Elliott. “At the same time, the platform will tell you that some of your clients have expressed dissatisfaction via email or other form of communication during this period—so through integration, the value of your technology totally changes as you pull together different sources of client and business information from different silos.”
Elliott describes integrations as providing a different level of scale and possibilities to advisors – “a bigger number of clients, with higher degrees of success but essentially using the same resources. All it takes is very clever design and different sources of integrated data working together. It creates what I think is a crucial ability to get ahead of problems and get ahead of risk on a scale that wasn’t possible before.”
A good integration has to continuously update, said Elliott, because most software continuously updates. As a result of most business software moving to software-as-a-service and/or cloud distribution, technology providers have moved from updating once a year or once every few years to several major releases in the course of a year.
Good integrations should also be easy to enable, said Elliott.
“Connecting one platform to another should be seamless at the user level when possible,” he said. “The exception would be that because wealth management is such a compliance-intensive industry, there are sometimes understandable compliance steps that need to be overcome in setting up certain point-to-point integrations. Some custodians have compliance requirements that need to be checked off when each firm activates an integration between them and another system – but there’s room for the industry to define those standards and automate that approval process.”
Many firms are building their technology stack around a CRM that serves as an integration hub, perhaps because of the depth of client information, but also because CRMs are aggressive integrators.
However, Elliott warned that many advisor CRMs often fall short on flexibility, customization and scalability.
“If your ambition is to offer the best service to clients that you possibly can at an ever-increasing scale, you’ll inevitably start to overgrow the potential of your CRM solution,” said Elliott. “A CRM could serve small practices quite well for some years, but there’s always a point for ambitious wealth management firms where they are no longer reasonable. Maybe you want to scale up and operate across multiple branches across the country. Maybe you want to have a broader service offering like tax accounting or private investments. Maybe you have an international, multijurisdictional business. At any point where you have a large staff, you need a platform with a roles-based user experience, and at that level of scale, the traditional CRM just doesn’t cut it.”
Practifi was designed to be a hub for growing wealth management firms, said Elliott, creating a unique but integrated experience for professionals across multiple roles.
“There’s no bigger reason we started Practifi in the first place than to solve that problem of disconnected information,” said Elliott.