Arch

Arch: A Deep Dive into Account Aggregation for the Modern RIA

Arch presents itself as a pure-play account aggregation solution tailored for Registered Investment Advisors (RIAs). In a market increasingly dominated by all-in-one platforms, its focused approach merits careful consideration, especially for firms seeking best-of-breed components within a modular technology stack. The core value proposition revolves around streamlined data reconciliation and improved reporting accuracy, both critical elements for RIAs managing substantial assets and navigating complex regulatory landscapes.

Core Capabilities and Institutional Application

Arch's primary function – automated data aggregation from multiple sources – directly addresses a significant pain point for RIAs. The ability to consolidate data from custodial platforms, brokerage accounts, and alternative asset holdings into a unified view delivers several operational advantages:

• Enhanced Portfolio Performance Reporting: Accurate and timely performance reporting is paramount. Arch's aggregation capabilities reduce manual data entry and reconciliation errors, improving the reliability of performance metrics used for client communication and internal analysis. This is particularly impactful for firms with high-net-worth clients demanding sophisticated and transparent reporting.

• Streamlined Financial Planning: Comprehensive financial planning relies on a complete picture of a client's financial situation. Arch allows advisors to quickly and easily access this information, enabling more efficient and accurate planning processes. This translates to increased advisor capacity and improved client outcomes.

• Accelerated Client Onboarding: The onboarding process is often fraught with data collection challenges. Arch can expedite this process by automating the retrieval of account information, reducing the burden on both the client and the advisor. This faster onboarding can improve client satisfaction and accelerate revenue generation.

The true institutional application of Arch lies in its ability to create operational leverage. By automating data aggregation, it frees up valuable time for advisors to focus on higher-value activities such as client relationship management, investment strategy development, and business development. This efficiency gain is crucial for RIAs seeking to scale their operations without proportionally increasing headcount.

Integration and Data Flow Analysis

The success of Arch hinges on its ability to seamlessly integrate with existing systems. The stated integration with portfolio management systems is a positive sign, suggesting a willingness to operate within a broader technology ecosystem. However, further investigation is needed to determine the depth and breadth of these integrations. Key considerations include:

• API Availability and Documentation: A robust API is essential for enabling seamless data exchange with other systems. Clear and comprehensive API documentation is critical for facilitating integration efforts. We would want to evaluate the API's capabilities regarding data write-back functionalities, not just read-only access.

• Data Security Protocols: Secure data encryption and storage are non-negotiable. Golden Door Asset would demand a thorough review of Arch's security protocols, including penetration testing results and compliance certifications (e.g., SOC 2).

• Compatibility with Existing Infrastructure: RIAs typically operate within a complex technology ecosystem consisting of CRM systems, financial planning software, and compliance tools. Ensuring compatibility with these existing systems is crucial for avoiding integration headaches and maximizing the value of Arch.

Compared to alternatives like Yodlee and Envestnet Tamarac, Arch positions itself as a focused solution. Yodlee, while powerful, can be overly complex and require significant development effort for integration. Envestnet Tamarac offers a broader suite of capabilities, including portfolio management, but may be overkill for firms primarily seeking account aggregation. The modularity of Arch is its strength, if the integrations are well-executed.

The Verdict: Who Should Adopt, Who Should Avoid

Definitively Built For:

• Growth-Oriented RIAs: Firms managing $1B+ in AUM seeking to streamline operations and improve advisor productivity.
• Firms Prioritizing Best-of-Breed Solutions: RIAs that prefer to assemble their technology stack from specialized vendors rather than relying on all-in-one platforms.
• Organizations Needing Granular Reporting: Firms demanding high levels of accuracy and detail in their portfolio performance reporting.

Should Avoid:

• Smaller RIAs with Limited Technical Resources: Integration with existing systems requires technical expertise. Firms without dedicated IT staff may struggle to fully realize the benefits of Arch.
• Firms Requiring Comprehensive Portfolio Management Capabilities: Arch focuses solely on account aggregation. RIAs needing a full-fledged portfolio management system should consider alternatives like Envestnet Tamarac.
• Price-Sensitive Organizations: Given the per-account/month pricing model, costs can escalate rapidly for firms with a large client base. Without transparent pricing details, it's difficult to assess the overall value proposition. We would require detailed pricing models and volume discounts before recommending adoption.

In conclusion, Arch offers a compelling solution for RIAs seeking to improve their account aggregation capabilities. However, a thorough evaluation of integration capabilities, security protocols, and pricing is essential before making a final decision. Golden Door Asset will continue to monitor Arch's development and market adoption to determine its long-term viability as a valuable component of the modern RIA technology stack.