A recent report from Corporate Insight offers a comparison of aggregation-based financial planning 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.

Aggregation-based tools are well suited to goal tracking and portfolio analysis, approaches vary depending on business model

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.

Betterment Aggregation-Based Financial Planning Tool

Each firm leverages these tools to offer recommendations that ultimately support the firm’s growth objectives; however, calls to action (CTAs) vary depending on the business model. Baseline robo offerings feature extensive CTAs 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.

Key findings emerged in our comparison of aggregation-based financial planning tools

In our comprehensive comparison of aggregation-based financial planning tools, we identified several overarching trends throughout the industry:

  • Firms tend to leverage the freemium model to drive customer acquisition
  • Advanced aggregation tools support offline assets and specialized accounts
  • Betterment, FutureAdvisor and Personal Capital offer goal tracking and portfolio analysis
  • Adjustable inputs enhance client engagement, improve analysis and encourage asset consolidation
  • Recommendations and calls to action (CTA) vary, depending largely on service model
  • Tools and advice embedded on the dashboard increase visibility of recommendations
  • Leading startups offer mobile-optimized portfolio analysis and goal tracking tools

Subscribers can view the complete report, which offers a full comparison of aggregation-based financial planning tools, on our client portal. For access, or for more competitive intelligence on the customer experience that digital advice firms provide investors, check out Corporate Insight’s Digital Advice Monitor research service offerings.