“Alone we can do so little. Together we can do so much.”
— Helen Keller, American Author
As of September 2022, the Kitces/Ezra Group Advisortech Map contains 383 applications and the number is increasing by 10-15 each month. A year from now, we could have over 500 logos squeezed onto a single page! Wealth management firms need information to help them sort through this tidal wave of software and make the right decisions.
The Ezra Group WealthTech Integration Score was developed to provide an objective rating system to compare the integration capabilities of software in each category and support building a reliable and compatible tech stack. However, it is also an effort to bring transparency to a topic that is not well communicated by most vendors.
One of our goals was to encourage vendors to provide more information on their integration support on their websites. Most vendors have little to no useful information about their integrations that’s publicly available. If they have anything at all, it’s just a bunch of logos, with no supporting documentation.
We believe that we should also be transparent about the methodology that we used to generate the WealthTech Integration Scores. It involved creating three scoring criteria – breadth, depth, and miscellaneous (security, API availability, and developer support) each with a different weighting.
Breakdown of the Scoring Methodology
Here’s how our scoring methodology looks at applications’ integration support across three criteria:
Breadth of Integrations
This criteria takes into account how many integrations a vendor has built. However, we did not want this to be weighted too heavily to avoid vendors trying to game their score by building many simple integrations (i.e., SSO), which is why this category is only 15% of the total.
We also do not simply use the raw number of integrations as the scoring basis, since each category can have different integration requirements. This is the only one of the three criteria that uses a relative formula. To calculate the breadth score for each application, the raw number of integrations is divided by the largest number of integrations in the category, with a maximum score of 1.
For example, if CRM software X has 30 total integrations, and the CRM with the most integrations has 50, we divide 30/50 = 0.6, which would be multiplied by 1.5 for a criteria score of 0.9. Another CRM application might have 45 integrations, so we would divide 45/50 = 0.9*1.5 = 1.35, which would be considered an superior breadth score.
Depth of Integrations
After scoring the breadth of integrations, we dive deeper into the specifics of those integrations. How does data flow between applications, is it one way or bi-directional? What types of data can be transferred? And are the integrations connected to the most common applications used by advisors?
Gathering the data for this formula required a tremendous amount of effort from our integration scoring team. They had to review every integration offered by every application and score it on a 1 to 5 scale based on its depth.
Several applications have many integrations, but many of them are for applications that few advisors use. Our list of key applications helps to gauge the depth and ensures an application with a good integration score offers deep integration capabilities to the applications that matter (and are used) the most.
This is why depth makes up 60% of the total integration score. An application must support integrations with most if not all of the applications on our list to score well in this metric and in ways that make sense and are useful to the end user.
The methodology also considers that some applications don’t need to integrate – for example, competing CRM systems. Researchers built into the methodology expectations of integrating with custodians, financial planning apps, and so on.
Ezra Group researchers used a five-point scale to judge integration depth:
- 0: no integration
- 1: Single Sign On (only)
- 2: Indirect integration (pop-up window, etc.)
- 3: One-way data, either pushing or pulling
- 4: Bidirectional data transfer
- 5: Best in class (tight integration between RIA and vendor, live data, next-gen features)
Out of the thousand or so scores researchers did, less than two dozen applications received a top score in this criteria. We made it intentionally difficult to get a high score in depth, since it makes up 60% of the total, and this ensures that high-scoring apps offer the highest quality and deepest integrations in their respective categories.
Ezra Group developed a list of key applications to ensure that highly-rated apps offer the integrations RIAs need most. This list is the result of comprehensive research on both the most commonly used applications by RIAs as well as ones that are essential to a complete tech stack.
While scoring applications, our researchers look for deep integrations with these apps. This way, choosing a high-scoring app will feature useful integrations with the following apps. We’ll periodically review this list based on ongoing research and industry trends.
|CRM||Redtail, Salesforce, Wealthbox|
|Financial Planning||eMoney, MoneyGuide, Right Capital|
|Risk Tolerance, Stress Testing & Proposal Generation||Finametrica, Hidden Levers, Morningstar, Riskalyze|
|Portfolio Management / All-in-One / Portfolio Rebalancing||Black Diamond, iRebal, Morningstar Office, Orion Advisor, Tamarac|
|Custodians||Fidelity, Pershing, Schwab, Other|
|Other||DocuSign, GMail, LaserApp, Office365|
Our research team will review the list of key applications on an annual basis and potentially add and/or remove applications as market share changes.
The early drafts of the integration score had six categories – which we thought could be confusing due to the amount of overlap. So, the team decided to merge several criteria into one that are now referred to as technical capabilities.
These are important characteristics that developers rely on when building systems such as security, authentication, API availability, sandbox and documentation.
Integrations can be both a godsend in how they’ll improve your office processes and a potential nightmare should they contain security flaws that open your firm up to cyber attackers.
Our researchers look for any history of previous security issues, check for certifications and support for the latest authentication software and use of cloud-based services that don’t require the other parties to request data directly from your internal network.
With so much data stored in the cloud, firms and clients must be confident that their data is protected. The skyrocketing number of cyberattacks – up 50% in 2021 alone – requires security to be a top priority for wealth management firms and their vendors. Application developers must show that they have taken the necessary steps to reduce this risk.
Certifications like SOC II and other proof of application security are required to improve this criteria. Ezra Group researchers also look for anti-phishing methods, such as passwordless authentication through tools like OAuth.
Availability of APIs and Develop Support
Applications that offer a wide array of well-documented APIs make integrations much easier. Quality, not quantity, is important here, so researchers look for APIs that offer access to regularly updated information and allow for bi-directional movement of data.
Your IT team are the ones that will build and maintain your tech stack, so ensuring they are well supported is important. Our research checks for extensive supporting documentation on available integrations and developer portals or dashboards where they can obtain company and community support.
Another important feature was the existence of a sandbox, where developers can test their code before pushing it live.
These three areas comprise the remaining 25% of the final integration score.
A Work in Progress
While the Ezra Group WealthTech Integration Score has been officially released to the industry, it still is a work in process. We will continue to adjust the methodology to improve accuracy and usability such as surveying wealth management clients to learn how well specific integrations worked and the ease of implementing a vendor’s APIs.
The team also plans to ask users of the integration score how their experiences with integrations went and if it was to their expectations. This data will be analyzed to ensure it matches what researchers expect from an app that receives that score. Those revisions to the integration score will come as that data flows in in the coming months.
For application developers, the team also plans to offer guidance on how application developers can improve their scores to make integrations more developer-friendly and useful for everyone.
Are you a software vendor that needs help enhancing your integrations and/or APIs? Then contact Ezra Group to learn how our experienced team can assist you with developing, documenting and testing your code to improve your application’s integration score.