Why Financial Advisors Need a 360-Degree View of Client Investments

Getting a complete view of a client's investments is crucial for financial advisors. However, it's often challenging to gather all the necessary information because clients' assets are spread across various accounts and statements. This fragmentation can lead to incomplete advice, missed revenue, and potential risks.

When advisors don’t have a full picture, they might overlook key investment opportunities or fail to identify risks. This can result in suboptimal advice, affecting client trust and satisfaction. Additionally, without comprehensive data, advisors may struggle to provide the personalized guidance clients expect, which can hinder their ability to grow their business and retain assets.

Fortunately, it doesn’t have to be difficult. By using AI-powered software such as OCR to scan and extract data from investment statements, and secure API integrations to link held-away accounts, advisors can achieve a comprehensive view of clients' investments.

In this article, we’ll explore how these features work and the benefits they bring, including improved financial advice, increased wallet share, and the ability to nurture the next generation of clients.

Why Viewing the Entire Investment Picture is Critical

Clients today expect their financial advisor to offer comprehensive and personalized advice. This requires a complete view of their investments. Here’s why having this holistic perspective is essential:

Aligns with Client Expectations

Clients today are well-informed and expect their advisors to have a full understanding of their financial situation. They want advice that considers all their investments, not just the accounts managed directly by the advisor. By using Investipal’s tools to gather and consolidate all investment data, advisors can meet these expectations and provide a higher level of service.

Provide Comprehensive Advice and Identify Opportunities

Having a complete view of a client's investment portfolio enables advisors to offer more comprehensive and tailored advice. They can identify opportunities for diversification, rebalancing, and optimizing returns. Additionally, advisors can pinpoint potential risks and develop strategies to mitigate them, ensuring that the client’s investment goals are met efficiently.

Grow Wallet Share

A holistic view of a client’s investments allows advisors to identify assets held away from their management. By demonstrating a deep understanding of the client’s entire investment picture, advisors can build trust and potentially convince clients to transfer more assets under their management. This not only increases the advisor's wallet share but also simplifies the client’s financial life by consolidating their investments with a single trusted advisor.

Nurture the Next Generation and Retain Assets

With The Great Wealth Transfer underway, it’s more important than ever before to engage with the next generation. As an unprecedented amount of wealth shifts from the older to the younger generation, advisors have a unique opportunity to build long-term relationships and ensure that these assets remain within their advisory firm. Whether it’s their Robinhood account, Schwab, or any other brokerage account, being able to view their portfolio and offer tailored advice allows advisors to foster trust and loyalty among younger clients, laying the groundwork for future growth and stability.

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How Investipal Makes Viewing the Entire Investment Picture Easy

Investipal streamlines the process of viewing the entire investment picture of clients through two primary channels: automated statement scanning and direct data feeds from held-away assets. Here’s how it works:

Automated Statement Scanning

Investipal’s Optical Character Recognition (OCR) technology, combined with AI, makes it easy to intake statements and incorporate the holdings into the complete wealth picture. Rather than manually transcribing holdings into an excel and then conducting an analysis, integrated automated statement scanning delivers several benefits, including:

• Efficiency and Accuracy: The AI-powered OCR technology automatically scans and extracts holdings information from brokerage statements in various formats like .png, .jpg, .pdf, and .csv. This eliminates the need for manual data entry, significantly reducing the time spent on administrative tasks and minimizing the risk of errors. Advisors can be confident that the data captured is accurate and comprehensive.
• Comprehensive Data Extraction: OCR can process a wide range of statements, including those detailing stocks, mutual funds, and ETFs. This ensures that all relevant information is gathered, providing a complete view of the client’s investments.
• Seamless Integration: The extracted data is automatically integrated into the advisor’s portfolio management system. This seamless process means advisors can instantly have a view of the portfolio including insights and analysis, allowing them to focus more on providing strategic advice rather than gathering data.

Direct Data Feeds from Held-Away Assets

While automatically scanning brokerage statements saves time, being able to directly link clients’ held-away accounts via secure API is even better. This feature provides all the benefits mentioned above, but goes a step further by delivering real-time updates and a continuous flow of data from external accounts.

• Real-Time Data: Secure API connections ensure that advisors receive the latest information on their clients’ investments. This real-time access is crucial for making timely decisions and providing proactive advice. Advisors can monitor portfolio performance, track market movements, and respond quickly to any changes.

By leveraging Investipal’s AI-powered OCR technology and secure API integrations, advisors can easily obtain a comprehensive view of their clients' investments. These tools simplify the data-gathering process, enhance accuracy, and ensure that advisors have the most current information available. This holistic approach allows advisors to offer better, more personalized financial advice, ultimately strengthening client relationships and fostering long-term growth.

Providing Holistic Financial Advice

How a Complete View Enables Better Financial Advice

Whichever method you use to intake the data, whether OCR or direct links via API, seeing all of a client's positions across all accounts enables more comprehensive and personalized financial advice. This complete perspective allows advisors to:

• Identify Gaps and Opportunities: By viewing the entire investment picture, advisors can spot gaps in the client’s portfolio that may need attention. For example, they might identify an overconcentration in a particular sector or asset class and recommend diversification strategies to mitigate risk.
• Optimize Asset Allocation: With all data in hand, advisors can ensure that the client's portfolio aligns with their risk tolerance and investment goals. This helps in optimizing asset allocation to achieve the desired balance between risk and return.
• Enhance Risk Management: A complete view of investments allows advisors to better assess and manage risk. They can identify potential risk factors and develop strategies to protect the client’s assets, ensuring that the portfolio remains resilient in various market conditions.

Strategies for Identifying Opportunities to Grow Wallet Share

A comprehensive view of a client's investments not only improves the quality of advice but also opens up opportunities to grow wallet share. Here are some strategies advisors can employ:

• Bringing Portfolio Risk Back in Line with Risk Capacity/Tolerance: By understanding the full investment picture, advisors can assess whether the client's portfolio risk aligns with their risk capacity and tolerance. If there are discrepancies, advisors can recommend adjustments to bring the portfolio back in line, potentially consolidating assets under their management.
• Identifying Underperforming Assets: With detailed insights into all investments, advisors can identify underperforming assets or funds that do not align with the client's objectives. They can then suggest alternatives that might offer better performance, encouraging clients to transfer those assets to the advisor’s management.
• Leveraging Tax-Efficient Strategies: Advisors can use a complete investment view to implement tax-efficient strategies, such as tax-loss harvesting or reallocating assets to more tax-advantaged accounts. This adds value to the client’s portfolio and can lead to more assets being managed by the advisor.
• Building Multi-Generational Relationships:  Advisors can leverage their comprehensive view of a family's investments to engage meaningfully with the next generation. This involves more than just managing accounts; it means understanding the financial goals and risk tolerance of younger investors and providing guidance that aligns with their unique needs and aspirations.
  1. Educating Young Investors: Advisors can play a crucial role in educating the younger generation about investment principles, financial planning, and the importance of long-term thinking. Linking in their self-managed, held away brokerage accounts, advisors can begin to provide advice and impart valuable knowledge that empowers young investors to make informed decisions.
  2. Leveraging Technology for Engagement: Utilizing modern tools and platforms that resonate with younger clients can enhance engagement. Mobile apps, interactive dashboards, and social media channels provide accessible and relatable ways for the younger generation to interact with their advisors and stay informed about their investments.
  3. Facilitating Family Conversations: Advisors can act as mediators to facilitate important financial conversations within families. By discussing estate planning, wealth transfer strategies, and financial goals openly, advisors help ensure that the next generation understands and respects the family’s financial legacy.
  4. Creating a Legacy of Trust: By successfully managing the transition of wealth and fostering strong relationships with the next generation, advisors create a legacy of trust and reliability. This not only helps in retaining assets within the advisory firm but also enhances the firm’s reputation, attracting new clients through positive word-of-mouth and referrals.
• Engaging with the next generation as part of The Great Wealth Transfer requires a thoughtful and proactive approach with the help of modern technology that resonates with their preferences and behaviors. Advisors who embrace this opportunity to educate, personalize, and continuously support young investors will not only retain assets but also build enduring relationships that span generations. This holistic strategy ensures the advisor's business remains robust and resilient, well into the future.

Bringing It All Together

Having a a full view of client investments is essential for providing the best financial advice and nurturing client trust. Investipal's AI-driven solutions make it easy to collect and manage all necessary data, ensuring advisors can deliver tailored, complete advice for all generations. Interested in learning more? Book a demo today and see how Investipal can enhance your practice.