This is based on a recent webinar presented by ByAllAccounts, a team at Morningstar Wealth financial data aggregation and enrichment service. For over 23 years, the organization has provided support to multi-custodied advisers, enabling them to reach their full potential through an unfettered network of advisor book business data providers.

Don McHenry, senior product manager at ByAllAccounts, and Hazal Sabah, director of product management, presented the webinar "How to facilitate custodial independence for your advisors."

According to Sabah, providing consumers with well-tailored advice requires accurate and complete financial data, as trust is the cornerstone of the connection between advisers and clients. The smooth integration and accessibility of custodial data, she continued, "is crucial for advisors who depend on this data to make knowledgeable decisions and precisely manage assets."

Regretfully, she added, there are many technological obstacles and strategic difficulties in the way of this data's smooth integration.

ByAllAccounts has assisted some companies in making decisions about allocating time and resources to developing custodial connectors internally versus collaborating with a provider and allocating those resources to other product roadmap components and enhancing platform distinction.

Sabah began by outlining how this choice is a result of their dedication to service and accessibility. The ability of a WealthTech platform to smoothly integrate advisors' managed assets is closely correlated with the size of the market it can service. Your platform's ability to offer thorough, hassle-free access to custodial data is not only advantageous in a world where most advisors are multi-custodial, but it also demonstrates your commitment to meeting advisors where they are.

Second, she mentioned that there are various difficulties with every custodial feed. These include data transport and formatting as well as enrichment procedures like security matching. The fact that every custodial feed will be distinct and require a different strategy emphasizes how difficult the issue is.

The fact that developing these integrations takes time is another crucial factor to take into account. For instance, Sabah mentioned that creating a single stream can take up to three months. Furthermore, in order to attain thorough market penetration, the quantity of feeds required may increase dramatically, resulting in an extremely lengthy product pipeline.

Sabah concluded by pointing out that the efforts needed to provide custodial feeds represent a large potential cost that might divert funds from more crucial areas of product uniqueness.

"I do want to say that this is not just an either/or decision but rather finding a balance between pursuing innovation that simultaneously sets you apart and building a comprehensive service offering," she continued. It's important to realize that your ability to solve problems and do it quickly will set you apart from the competition rather than just your feature set.

For more detailed information, watch the webinar, which covers topics such as supporting multi-custodied advisors and its data challenges, what to look for in a business aggregation solution book, the benefits of working with an industry expert who can provide custom data outputs and seamless integration without requiring custom development, and more.