|Guest Post: Yodlee Is Offering Free Account Aggregation With An Investor Dashboard For Controlling Advisor Access; Another Sign Of Fee-Compression Coming|
|Thursday, March 22, 2012 19:27|
Heads up: Yoddlee is offering free acount aggregation now that let’s investors share their aggregated data with their financial advisors. It’s ingenious. An investor signs up and sends an email to share his account data with an advisor or multiple advisors.
Here's how I see the Yodlee platform for consumers:
I believe this is almost the tipping point of one of the themes Andy Gluck has been hitting on for the last six months. CFPs seem vulnerable to losing market share in a world in which investors can self-direct advice.
The CFP designation has failed to innovatively use the mathematical capabilities of the powerful processors in today’s computers. The CFP is still taught to allow for a TI calculator or pencil and paper approach to calculations.
When you combine faster processors with making more mathematical calculations in support of algorithms with the ease of use enhancements to Web interfaces, the tipping point of for providing financial analysis has moved into the investor’s favor. First information, now analysis, is heading directly to investor. Fee compression will follow.
Most financial planning and asset allocation programs used by advisors rely on advisor inputs. Then voila, a 1% fee is earned. Much like when brokers were first wounded in the 90s with online trading, online advice is likely to kill advisors pinning their practice on asset allocation and financial planning.
CFPs need to get serious about making sure that the way financial planning is done for clients is regulated. CFPs use so many different ways to create plans and there are no accepted standards among CFPs on the right way to write plans.
What would happen if CPAs didn’t have accounting standards? That’s the equivalent of CFPs not having standards governing generally accepted calculations in financial planning.
Instead CFPs focus on who can be a financial planner, and show little if any regard for whether the planning (calculations) they do for clients are sound.
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