Account Aggregation Interest Sluggish
When account aggregation was first introduced four years ago, many brokers were ecstatic. With the new technology, clients could view all their account information via a single website. But interest is still low, according to a Spectrem Group report.
Current estimates reveal the total number of users to be less than one million, with usage within the affluent market at only 5 percent, according to the Spectrem group. By contrast, firms such as Piper Jaffray predicted much loftier numbers—more than 10 million users by 2002.
What’s the problem? According to Spectrem, firms offering aggregation haven’t fully addressed the concerns of investors or effectively conveyed the advantages of the new technology.
One rep from Salomon Smith Barney agrees, saying, "If this [account aggregation] concept is going to fly, clients need to really know more about the advantages and benefits of the service, and we have to help them embrace it."
Spectrem’s report says self-directed investors, those who make their own financial decisions without the assistance of a financial advisor, surprisingly had the least interest in account aggregation, despite their familiarity with the concept and technological savvy. It says the low interest may be due to a high comfort level with current tools and programs, or a general perception that aggregation will not meet their expectations.
Morgan Stanley became the first major retail firm to launch an account aggregation service in 2000, a move that was followed by Merrill Lynch and Salomon Smith Barney a few months later.
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