Aggregators set standards for the future.

Account aggregation has already gained a beach head in the local market but now the stakes are being raised as providers seek to add more to their offerings.

Jason Spits take a look at the future of this competitive market.

The concept of bundling products or services together to make it easier for consumer and adviser use is not a new idea. The local market has had bundled investment and insurance products for years and master trusts and wrap accounts have been doing a similar thing.

However the advent of account aggregation has taken this one step further allowing users to combine even those products along with a range of others to produce a single bottom line report of assets.

These products started out as little more than reporting services but have since had increasing levels of functionality added and have captured some of the spotlight as a new potential battleground.

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And if they sound like the province of peripheral players bear in mind that AMP and Macquarie have already rolled out products and other fund managers are looking at doing the same.

This is occurring while similar products are popping up in specialised areas such as superannuation and a number of the banks are also looking at rolling out these services, which are being prefaced by their online banking operations which already combine basic account details.

What this means is that lines are slowly forming over what shape account aggregating will take on and some of the services it will include.

One of the more recent entrants into the industry is InvestorCities, which is in the process of trailing its latest aggregation product among nearly 40 planners within the Australian Financial Securities group.

InvestorCities chair Brad McGougan says the single biggest issue in account aggregation, and the one to separate service providers, will be who actually holds the data of users.

"At the moment there are a number of offerings available in which the data is held by the creators of services, some are which are offshore. This means if that company goes out of business or if laws change governing that data offshore, it is comprised," McGougan says.

He is not alone in seeking a more secure playing field. Ewise.com.au chief executive Alex Grinberg says his group doesn't see anything wrong with the use of third parties in the process but the value they add needs to be very high.

"Unless they can offer something very special it is not a benefit as they lessen security and interpose themselves between a user and transactor," Grinberg says.

"This is plain wrong as it really doesn't provide any end user benefit and the more assets a user has, the less likely they are going to be to disclose information about them to a third party."

This approach of supplying a service but not being actively involved with the execution of the service has been Ewise's selling point as it has pushed into the market over the last few months.

However Grinberg is well aware that others will also enter the marketplace with similar strategies, confirming that this is indeed one of the yardsticks for accepted use.

"The first aggregators arrived on the scene in the last six months and since then the whole space is new so we won't be the last to do any of these things," Grinberg says.

According to McGougan the absence of a third party is an attitude that is becoming widely adopted with banks stating account aggregation is part of their platform but they wanted to have systems without any external involvement.

"Some of the local banks have indicated they want to hold data on their own systems, possibly using a badged service as long as it is hosted from their site," McGougan says.

And it is here where the likes of InvestorCities and Ewise will stand, offering a badged product and system infrastructure while not being actively involved in the data hosting or even having access to that information.

At present Ewise has more than 1100 individual clients while InvestorCities is in trial but both are aware that for them to survive they need to look beyond small groups of end users.

As such, apart from selling themselves as badgable services, they are also seeking to access the financial planning market. But to do so means providing even greater levels of functionality and services.

"We are looking at supplying this to financial planners as well as institutions, where planners can take this to their clients and can have the same access as that of their clients," McGougan says.

"However we are also looking at listing as we want to take account aggregation to the next level with access to transactions, so users will never have to leave the one page they log into."

Grinberg says Ewise is also looking at promoting the product to planners as a way they and their clients can share information.

"Advisers have stated they are using it to educate clients about their current positions and this has often been a precursor to them seeking further advice. It has also removed an administration layer that has decreased the costs of some of the value added services advisers provide," Grinberg says.

"And since the client controls the data it moves some of the responsibility to them to become involved, while also being the best tools to manage their privacy and reduce the need to create an enormous paper trail."