Few advisers have full access to client investment info, but continue to advise anyway

Most advisers don't have a bird'-eye view of a client's total investment portfolio, but that doesn't stop them from advising on assets that aren't under their purview. That's among the findings from a recent study by Fiserv Inc., which polled 603 financial advisers and found that 78% of them lack access to clients' full financial pictures. Basically, they're running short on data related to assets that are held away, perhaps in a self-directed investment account or at a workplace retirement savings plan. Still, 73% of the polled advisers continue to give customers guidance on those accounts, even though they don't have direct access to those assets. Such guidance is in high demand: 95% of the survey participants say that clients ask them about advice on accounts that the adviser has no access to. “Clients are asking for services on held-away accounts, and financial advisers are attempting to gather the related data,” said Rhonda Bassett-Spiers, chief operating officer of CashEdge at Fiserv. That unit of the firm provides data aggregation services to broker-dealers and their advisers through a service called AllData Advisor. Typically, advisers are piecing together information on held-away accounts based on paper statements brought in by clients or hunting down information through discussions. That information can sometimes be out of date. Inability to tap information on those account assets can lead to other complications. For instance, there isn't a clear way for the adviser to charge the client based on advice for held-away accounts. Only 20% of the polled advisers who give guidance on assets that are held away charge for their services. “In many cases, advisers don't have the ability to charge [for that advice],” Ms. Basset-Spiers said. “It's based on a verbal conversation, and the adviser isn't looking at the held-away assets. There is also no mechanism at their firm to be able to bill for ad hoc advice.” In practice, advisers tend to charge a reduced fee for advice on accounts that are held away, according to Nilesh Dusane, vice president for sales and strategy at CashEdge. “If you're going to provide advice, you need to have the visibility of the assets and a billing mechanism, so that the client sees on the statement that you've provided the service and here's the charge,” said Ms. Bassett-Spiers. Account aggregation doesn't permit a firm to take ownership of the held-away assets, but it corrals the client's investment information so that the adviser can have a view of all of the client's holdings. “That 401(k) that's administered by your company is under management elsewhere, but an adviser can still provide advice and charge for it,” said Ms. Bassett-Spiers “With the fee-based advice model becoming the new industry standard, there is a significant opportunity for financial advisers to leverage account aggregation as a method of providing holistic, strategic advice to investors,” she added.