Wealth firms reimagined the client and advisor experience over the past decade, from onboarding to portals, but the core portfolio management, largely stayed the same.
Across the industry, operations teams are absorbing a growing volume of manual work created by the gap between what their technology is supposed to automate and what it actually does. Rusty Sommer, Head of Partnerships and Marketing at Flyer Financial Technologies, sees a new standard emerging.
A core system of record with best-of-breed tools connected through robust APIs, all working from a common data set. The competitive question is no longer which interface the advisor sees. It is whether the architecture ensures clean, consistent data flow between every specialized system in the stack.
The conversation, Sommer says, has shifted to headless infrastructure. Firms want control of the advisor experience, whether built or ready, with a unified OMS layer, ecosystem connectivity for trading, rebalancing, and compliance without adding friction.
Put plainly: “The biggest gap is between the software’s intended automation and the manual babysitting required to make it work across a fragmented ecosystem.”
“As firms scale, the traditional response is to hire around the problem,” Sommer says. “But there is a point where that is no longer viable.”
Adding assets, clients, and product complexity increases the reconciliation points and exception cases. Each new system or tool introduced to address a specific need adds another layer to manage.
“You end up with a technology stack that grows without a clear structure,” says Tirdad Shojaie, Head of Platform Strategy. “Each solution solves a local problem, but it creates a new integration point. Over time, the seams between those systems become the problem.”
This accumulation of seams is not incidental. It is the direct result of leaving core infrastructure unchanged while layering new tools on top of it. As Shojaie frames it, this is the “manual tax.” It is not a single inefficiency, but the aggregate cost of operating across disconnected systems.
The complexity running through wealth management operations has changed materially in the last five years. Alternatives have moved from a niche 5% allocation to 15 to 20 percent. Custom fixed income portfolios returned. The back-office labor required to manage trading, portfolio management, and centralized investment implementation for these firms has grown significantly.
Clients expect custom direct-indexing strategies, tax-loss harvesting at scale, personalized portfolios across hundreds to thousands of accounts. The next generation of advisors is evaluating a firm based on their technology before their compensation. “Tech stack quality is now a primary recruiting and retention tool,” Sommer says.
Demand has evolved faster than infrastructure. The infrastructure carrying all of this has not kept pace.
The breakdown shows up in three places: exceptions, shadow work, and stale data. Consider a routine rebalance. The system reports that 95% of accounts processed cleanly. Leadership checks the box. For the advisor and trading desk, the picture is different. The remaining accounts carry stale prices, restricted securities, or wash sale alerts. None of it resolves automatically. The day to day isn’t spent working in client accounts. It’s spent manually fixing the exceptions that the automation couldn’t handle.
Then there is the work that never gets measured. Advisors toggle between four screens to prepare for a single client meeting. Traders manage different allocation rules for each custodian, what often feels like three workflows wearing a single mask. Portfolio managers maintain their own spreadsheets offline because the system’s tax lot accounting breaks down when combining advisor run sleeves with Separately Managed Account strategies and third-party models. These limitations result in lower adoption of a firm’s best thinking by advisors and less than ideal client outcomes.
Five years ago, waiting until the next day for settled custodial data was standard practice. Volatile markets, fractional shares, and the rise of alts have made that lag operationally dangerous. “If they aren’t using an Intraday Book of Record (IBOR) like the one in Co-Pilot, they are trading on yesterday’s news,” Sommer says.
Leaders routinely underestimate day-to-day switching costs for their employees: the cumulative time lost toggling between tools, managing non-standardized client cases, reconciling data that should already agree. At the executive level, a standard client takes X hours. At the desk, that assumption no longer holds. To the frontline, no client is standard anymore.
This is why the manual tax persists. It remains largely invisible to the people measuring capacity and performance.
Ask how much of this inefficiency is visible to leadership, and the answer is blunt: more than half of it is not. “The market grew up. The pipes did not,” says Sommer and Shojaie. And the firms still treating legacy infrastructure as adequate are running with a constraint they have mistaken for a cost of doing business.
This article is produced in partnership with Flyer Technologies
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