Platform Consolidation Is Wealth Management’s Top Priority

Managed account sponsors and turnkey asset management providers (TAMPs) continue to prioritize platform consolidation as they work to deliver more integrated, tax-efficient investment solutions, according to the latest Cerulli Edge—U.S. Managed Accounts Edition.

While the unified managed household (UMH) has yet to become the industry standard, Cerulli found that firms increasingly view household-level portfolio management as critical to meeting growing client demand for tax optimization and a more holistic wealth management experience.

The research found that 83% of managed account sponsors and TAMPs consider household-level tax management to be very important when developing a consolidated platform, underscoring the industry’s shift toward integrated portfolio oversight across multiple accounts and asset types.

Despite the strategic importance, implementation remains a lengthy process. Half of surveyed firms estimate it will take more than two years to consolidate their managed account programs onto a single platform, while another 39% expect the process to require one to two years.

“Platform consolidation remains an arduous task, requiring significant time and effort to complete,” said Scott Smith, senior director at Cerulli Associates.

A major obstacle is integrating data from multiple systems. According to Cerulli, a successful UMH platform depends on accurate, timely and standardized household-level data, requiring firms to aggregate information from numerous custodians, investment platforms and technology providers.

“The UMH relies on comprehensive, accurate, and timely data,” Smith said. “While this may seem simple to state, in practice, it is one of the most difficult problems to solve.”

Cerulli concluded that firms will be best positioned for long-term success by treating UMH implementation as a multiyear strategic initiative.