Protecting client data in account aggregation

With account integrations and a connected ecosystem becoming the gold standard for financial advice, an important first step will be client protections — especially for investors who may be weary of connecting all of their financial accounts in one place.

It’s up to advisers to communicate with investors who need help with understanding the management of risk across multiple accounts and products, while determining tactics to minimize taxes and coordinating the multiple accounts they’ve assembled over time, said Jason Moore, chief solutions officer at Orion Advisor Solutions.

“Investors need to make sure they're understanding their goals, making sure they understand why advisers would need that level of information,” Moore said. That’s particularly true for high-net-worth clients who likely have their assets separated. 

The key is to be transparent and articulate how the firm is dealing with privacy and cybersecurity, Moore said. “We spend millions of dollars around cybersecurity, and I think every firm that's out there that houses data needs to have a very focused effort around cybersecurity today that drives the fear away from clients having everything in one place.”

Tax management is another area of client hesitation, Moore said.

“Obviously, we're seeing the path that Congress is going with increasing the capital gains rates, the tax rates that'll be in place,” he said. “This is also a very important part of what we are achieving when we're leveraging technology.”