Will AI Finally Solve the Advisor Tech Stack Problem?

Advisors are always seeking the best way to help themselves provide better and more efficient service to their clients. Technology has advanced, so have options. Typically, advisors decided between whether to piecemeal what they believe is “best of breed” technology or seek out a packaged solution that contains everything they need.

In the past, some custodians have tried to become their advisors’ primary technology provider. But those efforts were mostly abandoned. Now, artificial intelligence is opening new opportunities for integrated data technologies, even at the custodian level.

In September, I attended Bob Veres’ Insider’s Forum and discovered the extent to which these new integrated offerings are becoming available. SEI and Altruist are examples of custodians building out high-level all-in-one solutions, while Advyzon and Orion are offering integrated packages that work with almost any custodian.

How should advisors react to these major technological advancements? Let’s explore the hype and the reality of three key questions.

Can Custodians Create an Integrated, Effective Consolidated Solution for Advisors?

Yes:

The economics of technology consolidation are becoming more attractive. Advisors spend too much time trying to figure out complex options, dealing with multiple vendors, and trying to integrate everything. A custodian providing everything in one prepackaged bundle can greatly simplify an advisor’s practice.

Mazi Bahadori, COO of Altruist, says. “The goal is to make it easier and more cost-efficient for advisors to run their business, and part of that is condensing their tech stack. Technology can also help advisors do more for their clients.”

Bahadori says that Altruist’s AI engine, Hazel, can also support sophisticated functions like tax and financial planning.

The value proposition is simplicity: one login, one dataset, lower costs, and fewer reconciliations.

Joel Bruckenstein, CFP, believes that potential technological breakthroughs are not limited to younger, smaller custodians. He says that the established custodians like Schwab, Fidelity, and Pershing “have the expertise and the money to compete. They can think long term. They can spend what they deem necessary to compete.”

Maybe Not:

Despite Bruckenstein’s optimism, the large custodians do not have a good track record. Schwab, Fidelity, and Pershing have all pursued creating their own advisor technology in the past. The goal was not just simplicity for advisors but also a stronghold on the advisors’ business. Unfortunately, these efforts proved to be less than ideal, and advisors continued to assemble their own independent collection of software solutions.

Tim Welsh, CFP, president of Nexus Strategy, says, “No one has been able to build the ‘silver bullet.’” Even if it’s possible, Welsh doubts that it will work for any other firms than small ones. “The more complex the firm—multicustodial assets, alternatives, family office work, held-away accounts, bespoke reporting—the more likely it is to outgrow any single provider’s roadmap.”

Bruckenstein believes that a custodian-provided technology suite is possible, “but it is not going to be preferable for all advisors. Some of these custodians try to provide it all, and to be multicustody, they will need to be able to process data from other custodians. I’m not sure that everyone will play nicely and readily share the data in the most seamless manner.”

Veres, of Inside Information, makes this point: “Not many advisors seem to be willing to trust their custodian as their tech provider.”

Finally, Welsh brings up an ethical question. “If your tech is free or bundled, how is it paid for, am I violating fiduciary duty, and does that tie my business more tightly to your custody?”

Does AI Give an Advantage to Integrated Platforms?

Yes:

AI means that integrated platforms’ data access can effectively link multiple aspects of technology, including meeting preparation, planning recommendations, rebalancing insights, and client services.

Veres says that within two years, everyone will have adopted AI, so the integrated platforms will be able to “access all the various places where data lives.”

Firms like Advyzon and Altruist appear to have a head start. Advyzon’s connected platform can bring together portfolio management, performance reporting, trading and rebalancing, client-relationship management, billing, document storage, financial planning, and investment solutions. Altruist offers a fully integrated experience, with account opening, trading, rebalancing, billing, and reporting in one platform. Other firms like SEI and Orion also offer their own style of an all-in-one solution.

Whether through an established source or a new company, you can bet more options will be coming. AI is making possible what might have been impossible (or extremely difficult) in the past.

Maybe Not:

While it’s true that AI can be helpful in creating all-in-one solutions, it also makes creating custom solutions more available to individual firms.

Welsh believes that “the point solution that lives on an island is dying. The best-of-breed tool that plugs cleanly into a firm’s data and workflow is not. When an agent can reach across systems through open connections, the question ‘Is it all one vendor?’ matters less than ‘Is my data accessible and clean?’”

Veres thinks advisors will more frequently opt to build it themselves. “AI is making it easier for advisors to hire a developer to create a custom solution for them. The barrier to creating a viable solution is incredibly low all of a sudden. I’m envisioning a flood of advisory firms selling their newly created solutions that do things that none of us ever thought of—and that means a lot of new standalone software programs invigorated with AI connections.”

Where Does All This Leave Advisors?

The Good:

A unified solution can be a great choice, especially for new or smaller advisory firms. Bahadori says that new practices should “keep the stack simple and fixed costs low, because early commitments shape margins for years.”

Welsh agrees, saying, “An all-in-one or custodian-bundled stack can get you to market quickly and cheaply, and your time is better spent on clients than on tech integration.” He cautions advisors to read the fine print. “Make sure you can take your data with you if you outgrow the platform, because the most successful firms usually do.”

The Cautions:

Whether for a new or established advisory firm, Bruckenstein is not a fan of custodian-provided software. “I’d try to maintain custodian neutrality as this evolution takes place. To me, that means keeping my tech separate from my custodial decisions.” For firms that don’t have the scale to build their own solutions, he recommends firms like Advyzon and Orion that can provide the capabilities that advisors need.

For established firms, Welsh advises not jumping in blindly. “Don’t rip and replace because of a shiny demo. Audit where your team actually loses time, whether that’s data reconciliation, meeting prep or rebalancing, and fix the most expensive friction first. For most established firms, the answer is a strong core system of record with carefully chosen tools around it, not starting over. Migration risk is real, and your clients feel it.”

What We Learned

To summarize:

• Advisors need flexibility as technology evolves.
• Firms should avoid locking themselves into closed ecosystems.
• Consider maintaining a degree of custodial neutrality.
• Consider all-in-one solutions if your firm is new or small.
• Focus on interconnectivity no matter which solution(s) you choose.
• Ensure that you own your data.

The latest push by custodians to become advisors’ technology providers is not simply another attempt at software bundling. AI has increased the value of integrated data and renewed interest in all-in-one platforms. At the same time, AI is making specialized software more powerful and easier to create. The winners will likely be the firms that provide advisors with the most accessible, portable, and AI-ready data, regardless of whether that comes from a single platform or a broader, open ecosystem.