“I’ll use a wealth management term, you want to diversify your portfolio, and so one of the things early on at Orion, we didn’t have a lot of options in terms of data aggregators, but over the years, we’ve learned to not put all of our eggs into one basket and to make sure that we have a lot of partners and we’re engaged with all of them. There’s a lot of differentiation in some of the aggregators, there’s different purposes to use other certain partners.”
— Randy Lambert, Executive Vice President, Orion Advisor Solutions
- CAIS [30:17]
- iCapital [30:00]
- Microsoft | Azure [22:46]
- Morningstar | ByAllAccounts [08:34]
- Pontera [06:26]
- Lessons Learned
- Comparing Data Aggregation Vendors
- Aggregator of Aggregators
- Trends in Data Aggregation
- APIs vs Cloud-Based Delivery
Craig: I’m excited to introduce my next guest, Randy Lambert, the Executive Vice President of Orion Technology. Hey Randy, welcome.
Randy: Hey, thanks, Craig. I really appreciate you allowing me to participate with you.
Craig: I’m glad you could be here, this is great. This is really exciting. We were just talking about when we last saw each other. It wasn’t that long ago, back at Market Council back in December.
Randy: Yes. That was great to see you as much warmer than it is today. We have snow on the ground.
Craig: Where are you calling in from?
Craig: Ah, yeah. The Heartland. I’m right now in Philadelphia. And it’s really nice, it’s gonna be 68 degrees.
Randy: Great, good for you.
Craig: You’ll get this weather soon. Like for a day in July you’ll have it and then it’ll be gone.
Craig: Great man. So today we’re talking about data aggregation, and we’re really happy you’re here to talk about it and you guys do so much worth work with it. You’re one of the biggest vendors in space, a huge market share with clients and you’ve done work with all the different vendors. So I’m really excited to hear your thoughts and trends and ideas but before we do that, could you please give everyone people who I can’t imagine but living under a rock and don’t know Orion Advisor Tech, can you give us a 30-second elevator pitch for Orion?
Randy: Sure. Well, we’ve been around for a while since 1999. And we provide a portfolio management platform that supports advisors and the independent advisor on their tech stack we have core offerings of financial planning, reporting, data reconciliation, trading, and advisory billing. So we just really support about 2,400 advisors across the country in their efforts to differentiate and grow their businesses and we’re there to support them in those efforts and it’s a real privilege to be a part of so many great RIA businesses and we are continuing to build our tech stack. We’ve been very aggressive in acquisitions last couple years to help provide more tools from a compliance and proposal standpoint with Hidden Levers of basis code, but we’re going to try to continue to add value to our independent advisors.
Craig: I would expect nothing less from you going forward. So let’s talk data aggregation, your firm, you work with all the top data aggravations and a lot of smaller vendors as well. So can you share some of the lessons learned from integrating them into your platform working with them over many years?
Randy: It’s a great question. I’ll use a wealth management term, you want to diversify your portfolio, and so one of the things early on at Orion, we didn’t have a lot of options in terms of data aggregators, but over the years, we’ve learned to not put all of our eggs into one basket and to make sure that we have a lot of partners and we’re engaged with all of them. There’s a lot of differentiation in some of the aggregators, there’s different purposes to use other certain partners.
Randy: The other part of that, and it kind of alluded to it you got to build into that relationship and ask them to progress along with you and in that partnership, and so, one thing from a data aggregation standpoint that we have learned is that direct feeds when we have the opportunity with the advisor to build a direct feed, they come in with a relationship with the financial institution, and they say, Hey, we have this relationship, we say yes, let’s let’s build a direct feed. So that’s also true. The data aggregators, that’s something they’ve kind of learned as well is that they’ve got to build direct feeds because the screen scraping capability, which is great, is not the direction things are going. Let’s leave it at that.
Craig: That’s old school. The old screen scanner, right? What are some of the challenges in setting up direct feeds? I’ve spoken to a lot of aggregation vendors, and that’s something they’re really working on, but they were they’re running into a lot of roadblocks.
Randy: Yeah, my assumption is that we’ve already had the agreement to work together, but that the hardest thing is getting the attention of the financial institution to work with you. Once they do say they want to work with us, which oftentimes does require the advisory relationship to get us over the hump. Once that is agreed upon, it’s just a matter of getting your file formats communicated with each other and having an engaged product development process where you’re working together, you’re testing the data and making sure that it’s meeting expectations of the end client advisor, so that can be a challenge. There’s a lot of back and forth. You can’t just snap your fingers and have a new direct feed built in 30 days, it’s usually going to require some back and forth 90 to 180 days to get that put in place.
Craig: How long does it usually take you guys to bring on a new data aggregation vendor?
Randy: I would say that an aggregation vendor it it’s sorry, that’s a little different than a direct fee is hat you’re asking?
Craig: Yeah, pivoted the question on you.
Randy: Yeah. So that the data aggregators, typically the ones that we’ve seen that come up to us, it takes a long time, depending on their capabilities. Some of them we’ve been able to plug in, FeeX is a good example of one that we’re able to plug into right away. Now it’s Pontera. I just learned that from Craig today, but that was a quick one, where we’ve had other ones that just take a long, long time to get going. It’s kind of the same scenario as the direct feed. It just matters on the relationship, the engagement level that they’re willing to have and your ability to put resources to it as well.
Comparing Data Aggregation Vendors
Craig: One thing we found in our consulting practice, technology consultants, as you know, and Orion has been a client of ours in the past and one of the things we were asked a lot is to compare technology. And one thing that’s been very difficult is comparing data aggregation technology because you can’t look at a demo to know which one is better, you can’t get a feed really, you’re not gonna pay for a feed that and try to analyze it. So a lot of it is anecdotal. So what are some of the things you guys have found comparing different data aggregations of different vendors against each other?
Randy: It comes down to differentiation. There’s a lot of data data aggregators doing things that are niche. And so I’ll name one name, ByAllAccounts has been a longtime partner and they provide daily transactions. They provide daily position files, and they’re engaged with us working with us and so that’s been a long journey with them. But that is an engagement that has proved over time we keep track of how many manual touches we have to have on the data and ByAllAccounts has significantly decreased over time and improved. And so when we have other partners that come to us, there’s a wide spectrum of data that that ByAllAccounts has, so then when another partner comes in and meet with us, what’s the value prop they’re gonna bring, and many times it is kind of a more niche business, but it’s a better quality of business. ByAllAccounts, there’s a lot of normalization of data. And so we do like to be able to drill down and go deep with an integration.
Randy: It is hard to compare the integration partners and so what you’ve got to do is really drill into what’s the value proposition that the advisor is going to get from that, how’s it going to impact the broader base of Orion clients that are going to provide value there, and so I wouldn’t put one up against another because they’re all coming at it a little differently, and Orion has to be willing to partner with people. That will provide more value to our advisors.
Craig: Let’s get a little geeky. You mentioned normalization of data, is that a good thing or a bad thing? Or is that something that you like or don’t like how does that impact –
Randy: From an aggregation standpoint, there’s a broad, tens of thousands of financial institutions out there. So in some senses, you do have to normalize the data a little bit, and so it’s acceptable. The best case scenario is a direct feed that is very narrowly focused and gives you really quality data from that direct feed. And so one of the things that we’ve done to help with dealing with data normalization is we have like I said earlier, we have 2400 different advisors, and they like to view certain transactions a little differently for their way that they report to their clients.
Randy: And so what we’ve done in that data normalization standpoint is we’ve created a tool called Account Composer, which allows our advisors to go in and show that differentiation for their book of business. So the ability for them to look at let’s say, ByAllAccounts has 20,000, and something like that 20,000 financial institutions that they work with. So the advisor might only work with three of them, and they’re bringing that data in, it’s been normalized, they might have some tweaks that they want to make to those three and so it allows the advisor to look at those three different institutions and put their touch on that data in a way that they like. So that’s one way that we have dealt with data normalization.
Craig: And for anyone who doesn’t know what that does understand that term, I see it as developing clean data and organizing it to appear similar across all records and fields. Would you say the same?
Randy: Absolutely. Yeah, it would be great if these 20,000 financial institutions all used the same data formats, but, the data aggregator has to take that in and it has to, you know, make decisions on where we’re gonna call this, you know, transaction A, we’re going to call that a feed transaction, they have to do some amount of intelligent ways of bringing that data and make it so it can be used by everybody.
Craig: Now, there are some vendors, without naming names, that don’t do as good a job. So they, you mentioned daily position files. There are some vendors that don’t provide daily position files. What’s the issue with that?
Randy: Our reconciliation process that we perform that Orion performs for all of our clients, we receive a position file every day. We reconcile that position file every day. And so if a vendor will only provide a monthly position file, then we’re not going to be able to have that level of confidence that hey, we reconciled to their position today and their value today some, some vendors actually provide us the value every day and we we reconciled to the value every day too, the value and the position. So yeah, that just gives you additional audits that we can perform and if you do it monthly, you might have a delta that’s out of position for a period of time until you get that position final again.
Aggregator of Aggregators
Craig: All this stuff was really interesting, you know, understanding how all this works and all the integrations between. So you mentioned Account Composer, which is your tool to help advisors mass edit, what their clients see, but have you built more of a consolidated fee, but what I would call an aggregator of aggregation technology?
Randy: That’s a great question. The answer is sort of, we’re in the process, Craig. We are working with a partner on having a general tool that we can pull in our fee file formats into one area, and we can make edits to it, and deploy those changes in real time. And so as we get feedback from our clients, or from our own internal users, we can make changes to transaction types and those sorts of things. It’s something we’re still working on, it’s not fully been implemented, but it is something that we’re going to put in place in 2022.
Craig: And what will clients see, what’s the value add, as you mentioned, what’s the value prop that the clients going to get from that?
Randy: They’re gonna have cleaner data and going to have that more real time. So as the advisor gives us feedback, or our internal users give us feedback, we’ll be able to make changes in real time. And it’s a little more flexible than what we currently have to do. Currently, if we had to make a change to a file format, we would have to use our development team to do that. So that’s a longer process. We got to use one of our sprints to do that and deploy it. So this is a great opportunity for us to be able to make those changes more real time and provide cleaner data for our clients.
Craig: Right. So the issue that you’re building basically some sort of overlay and some interface that a business user can interact with, rather than, I gotta call the developer to fix the file format.
Randy: That’s correct. You got it.
Trends in Data Aggregation
Craig: Nice. I like that. Alright, moving on. Let’s talk about trends. What are some of the trends you’re seeing in data aggregation that have changed the way you’re working with vendors or how the data has been delivered?
Randy: The screen scraping technology, multi factor authentication is causing some issues there. You can’t screen scrape when a financial institution asks you for multi-factor authentication. So I mentioned this a little bit earlier, but that’s where the direct feeds kind of come in. That is a trend that we’re definitely seeing.
Randy: Another trend that we’re seeing is RPA, robotic process automation. That’s something that we’ve been using for a couple years at Orion, and it’s continuing to impact many parts of our operations, it’s operational processing plus data reconciliation. So that’s an area where we see capability to deploy some automation on things that would normally have to do in a manual cleanup type scenario. And there’s things when accounts get added we have to go on and sometimes we have to add certain data to the system to get the account started. Well, now we can use the robot to do that type of function instead. So those are some of the top of mind things that we’re seeing.
Craig: Right so the RPA is it more of an algorithm, is it a rules based engine? Is it like a trigger? What’s actually underneath that?
Randy: It’s a technology. And it’s a literal robot. Not quite Skynet. You know, Arnold Schwarzenegger.
Craig: Well it’s not a literal robot, it’s software, right? It’s software running.
Randy: Yeah, it’s a computer robot. And so you just train that robot, and it learns for through machine learning it combines RPA combines machine learning and artificial intelligence to improve the process over time. And so there’s also some things that you can do. We have internal staff that can work with the technology and basically program it and then our partner that we’re working with also has consultants that help us do that. But yeah, you’re just training it to do certain steps, but it’s more than that. It’s not just triggers. It’s once you teach it to do something, it learns that and changes the process in an automated fashion. So it’s pretty cool technology. We’re just just scratching the surface on that.
Craig: I asked that because some people say they’ve got RPA or they’ve got machine learning and artificial intelligence, but it’s really not. It’s just some sort of rules engine in the back end. But but that sounds like you really have artificial intelligence. Yeah.
Randy: Yeah. We have a really great partner in that area. And it’s powerful. And like I said, what we’ve had to do is build our own internal competency around that we’ve had to hire an analyst, we’ve had to hire business lead, we’ve had to hire programmer. And then we have a director that’s in that area too, so we’ve added a lot of resources around it, but it’s a very powerful tool. 85% of fortune 500 companies are trying to leverage RPA at some level. And so what I found on that little journey is just that you’ve got to resource the effort. Otherwise, you’re not going to get the full use out of it. And so I think we’re on like the 25 yard line of that. I think it could be hugely impactful. But to bring it back around aggregation. I think it’ll touch a lot of parts of our operations, but part of it will also be some of these manual touches I talked about in reconciliation. I think we’ll be able to use the RPA tool to help us clean those things up real time.
Craig: As you said, it keeps learning and it keeps adjusting the process and making it more efficient the more data you feed it.
Randy: Yep. Exactly.
APIs vs Cloud-Based Delivery
Craig: Cool. Let’s go on, let’s talk about data aggregation vendors and how you interact with them. Are API’s taking over? Is it still something you’re looking to get into? How if you’re using them how well we work?
Randy: API’s are incredibly important to our business. Our clients use the heck out of them. Like we have an open platform. We allow advisors to come in and use API’s, but when you’re talking about data aggregation, it’s typically still a flat file, is how we receive that where we see kind of a curve jump in our ability, where we see a big opportunity for aggregators is cloud based technology versus the API. With the API you’ve got to call it and get data, it’s somewhat inefficient if you’re doing so let’s say millions of transactions. So it’s not the best technology for large files, the file format, you know, those type that type of a large file is actually more efficient to deliver it via SFTP or something like that.
Randy: So with cloud technologies, there’s some capability with AWS and other tools as well, where you can spin up virtual databases. So when you update say honestly use Orion as an example and one of our own client A is another example, is Orion updates the beta and client A’s database, there’s a virtual update of client A’s virtual data. And so there’s no calling API or anything like that. It’s just real time it’s there. And if we could get our arrogation vendors partners to could use that type of technology, Orion could have some very powerful ways of just updating transactions or changes real time with that custodial partner or the aggregation partner. I probably didn’t do all the technology terms quite right. But that’s what I see with cloud based is, there’s ability to create those real time data experiences and it’s going to be very powerful. Some of our clients are using it with us already, we just started offering that last year. And so advisors that are using that to put data into their Salesforce instance or add information to their client portal, those sorts of things. They are able to do that and it’s real time. It’s very powerful.
Craig: Yeah, I mean, we’ve done a lot of research in this area and looking at these cloud based tools, like you mentioned. It’s even better if the clients are also in the same cloud vendor. Like if they’re also an AWS, or if you’re using Azure, they’re working.
Randy: Yeah. And we do ask our clients because we’re using AWS, they have to get an instance. So that was very inexpensive. And that doesn’t cost them very much. It’s not like they have to use it for their core processing or anything like that. But in order to get this data, they just spin up this AWS database, and they’re able to access the data. And it’s it’s very powerful.
Craig: Yeah, costs are going down. Scalability is going up. It’s just across the board. Excellent. Let’s talk about my favorite question, can you share any horror stories? We love horror stories?. What’s something around data aggregation that you’ve dealt with in the past? No names of course, but something it was really bad that you had to recover from and what you did?
Randy: We had a vendor that basically stopped partnering with us and they said, Hey, we’re just going to turn off this aggregation that actually 40 of your advisors need and so we had to act really fast with that. And it was terrible, just in terms of having to deal with that kind of bleeds back into my what I’ve learned over time is having a diversified portfolio of aggregator partners that you work with and staying on top of it with the partner. I feel like we kind of lost touch with that partner. And then all of a sudden, they came to our doorstep and said, Sorry, we’re just not going to support this part of your business anymore.
Randy: So we did act fast and were able to get our clients moved to another vendor in a very relatively short period of time. And there was not a big gap in anyone’s business, but it was very surprising. I’ll just put it that way. And at a lesser level, just the whole thing I talked about MFA, multi factor authentication, we’ve had some things where we just have outages and you find out oh, yeah, that financial institution implemented MFA, you’re not gonna be able to get the data there anymore, that’s a shock as well. And so those can be very impactful to the end advisor for sure. And so that’s just something when you’re working with data aggregators, that’s why we say the direct feed is always the best and the aggregators working on with direct feeds, that’s always really good, too.
Craig: That’s a good one. There’s always issues when it comes to, you know, managing partnerships. We work a lot of companies that that have partnerships, integrations that they don’t even use anymore and they don’t know it, they’re still maintaining it or they start adding new partners without really thinking about well, this is something you have to maintain forever. You can’t just add it and leave it and forget about it. It’s got to be managed.
Randy: Yeah, totally agree. On that note just on our product side of our business, five years ago, we had one product person. And from a technology company, you have your end user, you have your product team, and you have your developers and so that for data aggregation and reconciliation, that’s an area where we really added a lot of product capabilities, because it is a relationship business, I mean, obviously, we’re in a relationship business all around. But when you’re talking about data, where you’re reconciling 4 million accounts every day, and you’ve got $2 trillion of assets under administration, you’ve got to make sure you’ve got a lot of product people that are all over the end user and the development team. And so that’s an area that we’ve really expanded our product team over the last couple of years. I guess I’ll go back to the beginning we needed to build our product team much better than we had previously.
Craig: That’s a great key learning because it’s not specifically technology related, but it’s logistics and staffing that you need to have for an area.
Randy: You need something you need people strategically working on and owning the relationship with the product vendor and working with your development team. And so that’s really the role that they play. We’ve always had a product team, but it’s just that area of the business is one that’s you got to really stay on top of it.
Craig: And we are running out of time. I want to squeeze in a couple more questions. Do you have any more best practices or thoughts around data aggregation you want to share?
Randy: I think it’s really important from a data aggregation standpoint from the partner. If you’re going to work with a company like Orion, one of the things we learned is that we’ve got to audit our practices. And so we we do a sock one report every year that we make available to our clients if they ask us for that. But what that is telling as an advisor, what does the sock one tell you? It tells you that Orion they have controls around the reconciliation processes and that they’re doing what they’re saying they’re doing. And we also work with our vendors on getting sock ones to make sure that they’re doing these things and and I think that’s something from a best practice standpoint.
Randy: I did reconciliation in 1993 When 15% of our business was able to bring it in electronically, 85% of what was manually maintained. I did a very poor job of it, I’ll tell ya, stacks and paper like this. Very difficult. Over time, it’s gotten much better but you have to have a third party come in and audit your processes and make sure that you’re doing what you say you’re doing from a reconciliation standpoint. So a little bit of a harping on compliance and and that sort of thing but I think that sock one is a is a best practice for sure.
Randy: Another area I hadn’t talked about that I think you might find interesting is did arrogation around GPs or alternative investments, general partners. We have a really great tool called Orion Vision that’s able to read GP statements. You want to talk about folks that are in technology 1980, 1990, it’s general partners on the vaults, they just, they don’t have file formats that they provide. But that’s an area that we really improved and we have a service that our advisors can subscribe to that automates the processing of those statements. And so that’s a really neat area of the business that I think is going to get a lot better and needs to get better. And I’ll put a plug in for our partners at iCapital they do provide us with a direct data feed of their alternative investments. And so we’ve worked really hard with them to build a direct data feed based off of their alternative investment platform.
Randy: I’m not going to name names but there’s another partner we really want to do that with as well. And that’s CAIS, I just named the name. They’re a good partner as well, and we just really want to try and build some direct feeds with some of these alternative investment partners.
Craig: Randy, you’ve answered all the questions. You’ve said it all can you please tell everyone where they can go to find out more information about Orion Advisor Tech?
Randy: Orion.com, really easy, and you can email me at Randy@Orion.com if you have any questions for me, happy to engage. One of the parts I like most of my job is working with our advisors and so I’m always available to try and meet with our clients or an advisor that’s interested in Orion. Orion.com.
Craig: Fantastic. Thank you so much for being here. Really appreciate it. Look forward to see and you at the next conference, man.
Randy: You bet. Great to talk to you, Craig, really appreciate what you do for us as a partner, like the information you provide to us is great, and what you’re doing for the community is a great service. So thank you.
Craig: You’re welcome. I appreciate that. Take care.