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Data aggregation's ROI for advisors

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Advisors are being exhorted to use data aggregation tools as a means to better understand their clients' financial behavior.

But there's a tangible ROI for using data tools also, says the head of one aggregation firm — about $2,000 in new revenue per client, he claims.

"We knew we were bringing efficiencies to advisor practices, but we wanted to find out if advisors were capturing assets held away," says David Benksin, founder of Wealth Access.

His firm surveyed 130 firms using Wealth Access' platform and found they were able to bring in 65% of $4.8 billion in client held away assets. Assuming a 1% fee, Benskin says, it averages out to an additional $240,000 per firm and $2,000 per client annually.

That's a revenue edge an advisor needs in an era of increased fee compression and growing automated advice, Benskin says.

"Aggregation is table stakes now," he says. "Every advisor needs to have it."

Benskin's story is well-known among his peers. A former Merrill Lynch executive, Benskin remembers having to collect boxes of receipts and statements from clients back then to help them plan their finances.

Exhausted, he built dozens of spreadsheets for every client to streamline the planning process — an activity at the root of the PFM app he later helped found.

The survey shows that there's value for advisors in aggregation beyond streamlining the process of gathering a client's financial information and making it easier for them to track their finances, he adds.

"The response we heard from end clients is, 'My advisor knows me,'" Benskin says. "Leveraging aggregation that is available anytime is pretty powerful for both sides."

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