Since 2020, the segment of platform sponsors that report having achieved a single platform architecture has increased from 14% to 30%, while those indicating ongoing stasis in a multi-platform environment has fallen from 32% to 20%. While these figures reinforce the long-term trend toward consolidation, the journey will likely be neither fast nor easy, according to The Cerulli Report—U.S. Managed Accounts 2024.

When asked about the expected length of a platform consolidation process, the majority of respondents (60%) cite an expectation of at least two years. Given the near constant state of strategic priority reviews within wealth management organizations, it is critical that these platform development efforts remain a central element to avoid them being overlooked and having the platform fall years behind competitors’ offerings.

The consolidation of various programs, including mutual fund advisory (MFA) and rep-as-portfolio manager (RPM), onto a single flexible managed account platform that offers full access to a broad array of product solutions as well as variable discretion entitlements is one of the key elements to spurring advisor adoption. By focusing their enhancements on a single platform environment, sponsors minimize the inertia to overcome advisor reluctance as implementation will not require advisors to learn a whole new system, but simply to become familiar with a new feature on a platform they are already using.

When designing the specifications for a consolidated managed account program, sponsors must consider a wide variety of factors to balance the costs and feasibility of completing the project with the incremental benefits it will offer in its final form. Platform sponsor respondents consistently cite three factors most frequently as “very important”: a single advisor login for all managed account portfolios (80%), streamlined middle-office workflows (73%), and a universal client investment contract (67%). Together these factors set the baseline expectation for development of a consolidated platform by creating a path of least resistance from the time advisors open their workstations through to account opening and portfolio implementation.

“The relationship between advisors and the technology they use to serve clients is one of the most crucial elements of the wealth management ecosystem,” says Scott Smith, director. “Advisors must be able to leverage the solutions at their disposal to help meet the preferences and goals of their clients. In today's wealth management environment, every part of that process is dependent upon advisors making the most of the technology platforms available to them.”

Unfortunately, for most advisors, there is a wide delta between their actual and optimal use of these platforms. “Lack of time, training, comfort, reliability, and perceived need all contribute to advisors’ reluctance to fully adopt the systems available to them,” adds Smith. “To help advisors overcome these points of resistance, providers must be able to prove that their platform will offer solutions that are a combination of easier, better, faster, and cheaper than those they are currently using.”