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ByAllAccounts doubled advisory assets aggregated to $400 billion in 2011

New partners like Redtail Technology, Envestnet and AssetBook helped pave the way

Author Brooke Southall March 12, 2012 at 3:09 AM
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James Carney: The cost of [paying] us versus what they get [in revenues] is a rounding error.

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Mentioned in this article:

State Street Wealth Manager Services
Asset Custodian
Top Executive: Marty Sullivan

Redtail Technology
CRM Software
Top Executive: Brian McLaughlin

Envestnet Inc
Top Executive: Jud Bergman

Bill Winterberg

Bill Winterberg

March 12, 2012 — 1:03 PM

Growth of aggregation isn’t limited to individual financial advisors.

Look at the growth of employee trade monitoring, notably by provider Compliance11. They aggregate many thousands of accounts with ByAllAccounts and are growing rapidly on their own, leading to an acquisition by the Charles Schwab Corporation in November 2011.

I covered Compliance11 for Morningstar in this column: <a href="http://www.morningstar.com/advisor/t/46368111/say-goodbye-to-paper-based-compliance-practices.htm" rel="nofollow">http://www.morningstar.com/advisor/t/46368111/say-goodbye-to-paper-based-compliance-practices.htm</a>

Stephen Winks

Stephen Winks

March 12, 2012 — 10:29 PM

When originally conceived By All Accounts was a most exciting innovation as it is literally not possible to know whether an advisor adds value or not until the advisor makes a recommendation in the context of all a client’s holdings. Only then is it possible to determine whether a recommendation improved overall portfolio returns, reduced risk or enhanced the tax efficiency, liquidity, cost structure of the client’s holdings as a whole. The evaluation of all a client’s holdings as a whole is required by statute before an advisor makes a recommendation and is an important difference between a broker and advisor. In reviewing a client’s holdings as a whole the advisor develops a rationale for making an investment recommendation. This is the essential ingredient of personalized advice which is fiduciary counsel.

Every advisor in the business that hopes to act in a fiduciary capacity must use account aggregiation technology like “By All Accounts” if they aspire to achieve fiduciary standing.
This was true ten years ago and true now.

Congratulations to “By AllAccounts” for preservering, hanging in there to elevate the role and counsel of the broker, even when broker/dealers were very slow in their support of advisory services. With Dodd-Frank every broker/dealer is obligated to support account aggregiation as an important component of an asset/liability study required for fiduciary duty/ standing.

Competitive market forces will eventually force the brokerage industry to be responsive to the advisory services needs of the consumer and the advisor. By-All-Accounts is just at the beginning of a very steep adoption curve that will hopefully reward the difficult hard times it took to advance innovation essential to advisory services required by objective, non-negotiable statute, case law and regulatory opinion letters.

By-All-Accounts has been the carary in the advisory services coal mine that demonstrates advisory services are are well and fine and that a seperate and distinct advisory services industry is emerging with the scale to survive and thrive outside the brokerage format which creates a new dynamic where advisors can demonstrate a superior and less expensive value proposition than commission sales.

The insular nature of the brokerage industry to the needs of the consumer and the broker is no longer an inhibitor to fiducuary standing as recources like By-All-Accounts make anything less the full support of fiduciary duty self-defeating.


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