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Corral Your Finances: A Guide to Account Aggregation

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Corral Your Finances: A Guide to Account Aggregation

We live in an age of technology, and the financial services industry is no stranger to these advancements. Chances are you have already benefited from these advances such as by registering your bank account or 401(k) online so that you can readily view your account balances. In an age of technology, convenience is key, and it seems that these days it is easier to remember state capitals then it is to remember all of our different usernames and passwords out there on the Internet. Fortunately, as financial services were advancing so too were our financial tools. Today we can rely on Account Aggregation tools to make our lives easier and more manageable.

What is Account Aggregation?

Imagine if you will, that all of your accounts; savings, checking, investments, retirement, etc. have all sprung to life and are running around like loose cattle. While this might seem like an odd analogy (unless you are in fact a cattle baron), essentially, without Account Aggregation, most people’s accounts exist in many places with little organization. Fortunately, this can be remedied with a little digital corralling! 

Account aggregation is a process that allows both individuals and their households to collect all of their account information in one place. Some Account Aggregation programs exist as part of another service such as through your bank or stockbroker, and others are their own separate financial tool. 

How does it work?

Generally, when you sign in to your financial institution, you will need to enter your username and password. Upon logging in the information you would see details specific to that institution, and unless you have multiple accounts at the same company, you may find yourself relying on using a notebook or spreadsheet to keep track of all of your accounts in one place.

Account Aggregation allows you to choose a participating financial institution (if they provide this access) or separate aggregation tool to have a Single Sign-On (SSO) where you log in with one username and password but can view all of your accounts across different institutions. In setting this up, you will need to put in some work such as entering all of your different login information. However, after you have completed this, you will now have an SSO that will automatically download account balances and some transactional data from each account you have chosen to include. Now you can see all your data in one screen!

Who are the major players?

As online banking emerged in the 90s, Account Aggregation was soon to follow. While some of the earliest players might have been in-house Account Aggregation tools from your financial advisor or bank, today many banks and online brokers offer this service through a 3rd party Account Aggregation tool. Fortunately, financial institutions will notify you of what software is downloading your data, so you can make a more fair comparison.

In this space, the major Account Aggregation providers are Mint, Blueleaf, Envestnet/Yodlee, Personal Capital, Plaid/Quovo, and Quicken. Among these tools, some are primarily designed for the budget-conscious, while others are targeting the savvy investor. While many of these services may have some similar features, it is important to ask yourself three important questions in this research:

  1. What types of services do I need?
  2. What does it cost? Or how does this provider profit?
  3. How do I use the tool to turn analysis into action?

While I would encourage anyone to conduct their own research on these various Account Aggregation tools, please also see our consumer comparison guide of different aggregation models to what My Financial Coach has to offer.

How do they compare?

Click the image below to see our Consumer Guide to Account Aggregator Model:

I hope that this information has been informative. Regardless of which financial Account Aggregation tools you find work best, with the right tools I just know that you will be able to corral your finances!

Best,

Andrew J. Crosby, CFP®, ChFC®, RICP®

Lead Financial Coach

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