How APIs Can Strengthen the Financial Planning Experience

June 30, 2021

What You Need to Know

  • By integrating APIs, advisors can incorporate data from clients' other accounts into financial planning portals,
  • Data about other accounts enhances the wealth management and planning experience for clients, and helps advisors create a more holistic financial picture.
  • Advisors should make sure prospective tech vendors have a track record of rolling out innovative planning features, and ongoing updates, through APIs.

While many consumers have likely heard of application programming interfaces (APIs), they may not fully understand how these tools work or why they matter. An API enables two different technology applications to talk to each other — sharing data — which improves the overall user experience and value of both.

By integrating APIs developed by third-party financial planning software providers, financial advisors can incorporate data from additional client accounts into the financial planning portals through which they communicate, and significantly strengthen the planning experience for clients.

For example, account aggregation APIs allow a client’s accounts and loans from other financial institutions to be linked to in their financial plan within the advisor’s platform, so that real-time data about those accounts and loans can be visible to the client when they log into the client portal. The inclusion of up-to-date data about other accounts and loans in their financial plans not only enhances the wealth management and planning experience for clients, but also enables advisors to create a more holistic picture of each client’s overall financial picture. Account aggregation APIs, which talk to the applications from the other financial institutions where the accounts and loans are held, also ensure these assets are taken into consideration when financial plans are updated, and help advisors enrich the advice they provide. 

Advisors can also utilize APIs to incorporate a broader spectrum of financial planning tools into their client portals and other client-facing solutions. APIs from planning technology providers can enable advisors’ client portals to show clients their net worth as well as their savings and goal progress, and what adjustments would be necessary to make improvements. Other APIs are designed to help advisors and financial institutions capture and manage client data such as household demographics and members, financial accounts and assets, and liabilities to strengthen advice, as well as recommendations in financial plans. 

Liberating Advisory Practices

Developing technology solutions from scratch requires a great deal of time and money. APIs free advisory firms — small and large — from these challenges. Besides integrating with third-party technology providers, APIs can enable advisors to actually embed capabilities from third parties within the user experiences in their practices for themselves, back-office staff, and clients. Advisors can also create customized workflows that make these user experiences more efficient using APIs.