Key data trends driving success for wealthtech startups

Presented by Morningstar ByAllAccounts

Wealthtech startups are transforming the fast-paced financial management industry, and the competition is fierce. Join this VB Spotlight event for a deep dive into the key industry trends and crucial fintech tools and strategy that can keep you ahead of the pack.

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Wealthtech, the subset of fintech that delivers personal finance, investment and wealth management, is an evolutionary step forward for the financial services industry. Tools like robo-advisors, digital wealth management platforms, and online investment platforms are changing how consumers think about their money, and how financial managers engage their clients. As an offspring of the digital age, the industry also sees consistent waves of innovation that shake up the market again and again.

“Staying ahead of these trends can be challenging as technology gets more sophisticated and data quality becomes an essential competitive differentiator to the success of wealthtech startups,” says Don McHenry, senior product manager at Morningstar ByAllAccounts.

A growing emphasis on data

One of the most significant trends in wealth management platforms is the growing emphasis on data. To function effectively, these platforms require interoperable data across the tech stack, advisor and investor workflows, and back-office operations. Ensuring consistency in data reduces costs, requires less manual intervention and leads to happier clients.

There’s been an explosion of specialized wealth tech solutions and platforms, which has been a great development for the industry,” McHenry says. “It’s allowed firms to integrate the best-in-class solution from multiple vendors, resulting in greater functionality and flexibility, and more ways to scale their practice by putting that stack together. And leveraging these specialized solutions has allowed advisors to focus on core competencies.”

The trend is a positive step forward, but it also highlights how central data is to wealth management platforms.

“Whatever the advisor is seeing needs to be the same as what the client is seeing and what the back-office operations team is seeing,” he explains. “The back-office operations team is a stakeholder that’s often overlooked, but it’s important that the data is interoperable not just for the external users, but also the internal users.”

With wealth managers using a plethora of specialized vendors, ease of integration also becomes crucial. Integrations have become a true pain point for companies, making it critical for wealthtech firms to partner with vendors that have a proven ability and track record to support them. It’s not just about finding vendors that offer ease of integration, although that’s certainly important. It’s about finding vendors that have the expertise to navigate complex integrations seamlessly, reducing costs, minimizing manual intervention and preventing errors.

The power of use-case-specific data

Use-case-specific data, or data that’s been formatted and prepared for the purpose of powering discrete solutions, is incredibly important. It saves costs, increases customer satisfaction and more. Scope, quality and delivery are the most important factors, says McHenry.

“When it comes to scope, It’s important for wealthtechs to gain a full view of their client’s assets, including the difficult to access accounts,” he says. “Broad coverage of these data sources, and the long tail, should be top of mind when selecting a financial data aggregation partner, to provide that full, holistic view of a customer’s assets.”

As for quality, the data not only needs to complete and accurate, but also needs to be enriched to make it actionable. This means that when choosing a vendor it’s important to understand what it specializes in and what markets it serves. Many vendors have specific areas of focus, such as payments or credit decisioning or portfolio management. Understanding that specialty and what markets it serves will give you a better idea of the enrichment that they offer and the quality of data that you can expect.

Lastly, the delivery of data should be adapted into a format compatible for the receiving system. Partnering with data providers with use-case-specific tooling reduces costs for the receiving platform by shaping the data to meet their specific requirements. “It’s also important that doesn’t just happen once. A feedback loop established between the data provider and receiving platform means that the delivery is continually optimized,” McHenry points out.

Portfolio analytics is driving personalization

Portfolio analytics plays a crucial role in achieving personalized investment and tailored advice at scale. By enriching investment holdings with actionable data points, it provides the visibility needed to optimize asset allocation, reduce risk, lower costs and diversify portfolios. It also contextualizes held-away accounts, ensuring holdings align with a client’s risk tolerance and are sufficiently tax-efficient. This approach enables personalized advice at scale.

“Enriched and aggregated data helps provide transparency into the makeup of a portfolio, empowering wealth managers to make personalized recommendations,” says McHenry.

To learn more about the ways data quality impacts wealthtech startups, how to ensure your company is on the cutting edge of the financial management industry, the most important trends coming down the pike and more, don’t miss this VB Spotlight event!

Register now to watch free on-demand!


– Top 5 trends in wealth tech for 2023
– Why high-quality, use-case-specific data is crucial for wealthtech solutions and apps
– How to accelerate innovation with tight integration of aggregated data
– Why best-in-class market data is key to staying competitive
– And more!


  • Reed Colley, CEO and Co-founder, Summit Wealth
  • Don McHenry,Product Management, Morningstar ByAllAccounts
  • Greg Miles, Moderator, VentureBeat
Originally appeared on: TheSpuzz