June 2018 – Financial Planning for the Digital Customer: Aggregation-Based Portfolio Analysis & Goal Tracking Tools

In the digital advice space, financial planning is supported by aggregation technology that provides visibility into investors’ externally-held accounts. For digital advice customers, this feature serves the important purpose of supplying a 360-degree view of their financial lives. Aggregation technology has also contributed to the creation of goal tracking and portfolio analysis tools that perform financial planning tasks normally reserved for human advisors. These tools simplify goal planning and reveal key issues impacting goal progress that may not be readily understood by everyday investors. For digital advice firms, aggregation-based tools also create natural opportunities to encourage asset consolidation and position products and service as solutions.

Although the technology has been available for almost 20 years, only 31% of firms in the Digital Advice Monitor coverage set offer aggregation-based portfolio analysis and goal planning tools. Two of the firms provide both goal planning and portfolio analysis, effectively linking financial planning and the identification of portfolio issues. Two provide only portfolio analysis that highlights key issues in externally-held accounts and one firm offers only an aggregation-based goal planning experience. Each firm leverages these tools to offer recommendations that ultimately support the firm’s growth objectives, however, calls to action vary depending on the business model. Baseline robo offerings feature extensive calls to action that encourage asset consolidation and frequent deposits, whereas firms that rely on advisor-facing support direct investors to speak with CFPs regarding portfolio issues and future goals.

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