Best-of-Breed vs. All-in-One Solutions in Wealth Management

A strategic decision for RIAs

Table of Contents

Introduction

In the dynamic landscape of wealth management, registered investment advisors (RIAs) are increasingly confronted with the need to adopt sophisticated technology to enhance their operational efficiency and client service.

The central question many firms face is whether to build their technology stack using best-of-breed solutions—selecting the top-performing software for each specific function — or adopting all-in-one solutions, which offer a comprehensive suite of integrated tools from a single provider.


All-in-one and best-of-breed solutions are both approaches to building a technology stack for a business, and each has its advantages and disadvantages. The best software strategy for an RIA will depend on its unique needs, and there are also hybrid solutions that combine all-in-one and best-of-breed approaches.


This whitepaper delves into the strategic considerations that RIAs must weigh when choosing between best-of-breed and all-in-one solutions, examining the advantages and limitations of each approach. Additionally, it explores the emerging hybrid models that combine elements of both strategies, offering flexibility and customization to meet the diverse needs of wealth management firms

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SECTION 1 Best-of-breed solutions: Excellence through specialization

Best-of-breed solutions represent the pinnacle of specialization in the technology landscape. These tools excel in a specific function—such as portfolio rebalancing, CRM, or compliance—by offering advanced features, superior performance, and a focus on optimizing user experience. Best-of-breed tools are often chosen for their ability to integrate with other systems, allowing firms to create a tailored technology stack that meets their unique operational requirements.


Best-of-breed solutions solve specific or strategic problems that the general capability of all-in-one solutions cannot address. The best-in-breed technology mindset seems to have far outpaced the all-in-one platform concept among financial advisors.1 For example, many advisors are utilizing trading/rebalancing software to incorporate features that are missing from industrial-strength portfolio management solutions, according to the 2024 T3/Inside Information Advisor Software Survey.

Advantages of best-of-breed wealth management solutions:

Superior functionality

Best-of-breed solutions are designed to perform a specific function exceptionally well.

For example, in portfolio rebalancing, a best-of-breed tool can offer advanced rebalancing capabilities, seamless integration with other platforms, and customizable views that enhance advisor and client experiences.

Innovation and adaptability

Vendors specializing in best-of-breed solutions are often at the forefront of innovation, continually enhancing their products to meet the evolving needs of the industry.

This focus on a single area allows for rapid adaptation to new trends, such as direct indexing or advanced tax-loss harvesting strategies.

Cost efficiencies

Best-of-breed solutions can lead to cost savings for firms. By only investing in specific technologies and applications necessary for their operations, companies can avoid spending money on unnecessary features and functions that may come with a comprehensive, all-in-one solution.

Additionally, if one vendor raises its prices or does not meet expectations, businesses can switch to a different vendor for that specific technology.

Customization and flexibility

RIAs can select the best solutions that align with their specific business processes and client needs. This customization extends beyond individual tools to the broader technology ecosystem, enabling firms to integrate various best-in class application for highly personalized service delivery.

Challenges of best-of-breed solutions:

Streamlined operations

While best-of-breed solutions offer superior functionality, integrating multiple systems and data flows can be challenging.

In a 2022 Cerulli and InvestmentNews Advisor Survey, 94% of practice management professionals found limited technology integration creates productivity challenges, and 57% of advisors said the lack of integration between their core applications is the most significant pain point with technology.

 

Operational complexity

Managing a diverse tech stack composed of multiple best-of-breed solutions can lead to increased complexity in workflows, user training, and vendor management. This complexity might hinder smaller firms or those with limited IT resources from fully capitalizing on the benefits of best-of-breed systems.

In a 2023 intelliflo survey, 38% of advisors said the time and resources needed to manage technology was one of the biggest barriers to adopting new tech.

 

Vendor management

Engaging with multiple vendors requires more time and effort in managing relationships, negotiating contracts, and coordinating support, which can detract from the firm's core focus on client service.

SECTION 2 All-in-one solutions: simplicity through integtration

All-in-one solutions offer a comprehensive approach by integrating multiple functionalities within a single platform.

These solutions are designed to simplify operations by providing a unified system that can handle everything from client relationship management to portfolio management and compliance.

Advantages of all-in-one solutions:

Streamlined operations

With all-in-one solutions, firms can benefit from a single, integrated platform that reduces the complexity of managing multiple systems. This simplicity can lead to more efficient workflows and easier onboarding for new users.

Ease of integration

All-in-one platforms offer pre-integrated functionalities, eliminating the need for extensive customization and reducing the risk of data silos. This ease of integration is particularly appealing for firms looking to minimize the challenges of maintaining a complex tech stack.

Cost efficiencies

By consolidating multiple functions into one platform, all-in-one solutions may reduce overall technology costs, including those associated with vendor management and system maintenance.

Disadvantages of all-in-one solutions:

Limited customization

While all-in-one solutions offer a broad range of functionalities, they may not provide the depth or flexibility required to meet specific needs. For instance, a wealth management firm may find that the portfolio rebalancing features of an all-in-one platform are less robust than those of a specialized, best-of-breed tool.

Potential for mediocrity

By trying to cover all the bases, an all-in-one solution may end up offering mediocre functionality across the board rather than excelling in any particular area. This trade-off can be a significant drawback for firms requiring advanced capabilities in specific areas.

Risk of vendor lock-in

Relying on a single vendor for all technology needs can lead to a lack of flexibility and innovation, as the firm becomes dependent on that provider’s pace of development and strategic direction.

SECTION 3 Hybrid approaches

It is well known that advisors spend a lot of their time on administrative tasks.

Recent research has suggested it's more than 20% of their time, and informal surveys put that time even higher.

The right solution should allow RIAs to free up time to focus on client-facing priorities and value-added activities, like growing their business.

This is why many RIAs are increasingly adopting hybrid approaches that combine the best elements of both best-of-breed and all-in-one solutions. By integrating the best-of-breed tools into a core all-in-one platform, firms can achieve the flexibility and specialization they need while maintaining the operational simplicity of an integrated system.

Advantages of hybrid solutions:

Best of both worlds

Hybrid approaches allow firms to leverage the specialized features of best-of-breed tools for critical functions like trading and rebalancing while relying on an all-in-one platform for other operations like CRM and billing. This balance provides both flexibility and efficiency.

Scalability

As firms grow, hybrid approaches offer the scalability to integrate additional best-of-breed solutions as needed without overhauling the entire technology stack.

Enhanced client service

With a hybrid model, firms can tailor their services more closely to client needs, providing a seamless experience that is both personalized and efficient.

Disadvantages of hybrid solutions:

Complexity in management

While hybrid approaches offer flexibility, they also require careful management to ensure that all systems work together smoothly. This complexity can introduce challenges in maintaining consistent data flows and efficient workflows.

Strategic alignment

Ensuring that the combination of best-of-breed and all-in-one solutions aligns with the 
firm’s long-term strategic goals is crucial. This requires ongoing evaluation and potential adjustments to the technology stack.

"Since going live on RedBlack, we've improved operational efficiencies, business continuity, and overall agility in a highly reliable cloud-based environment. As always, the RedBlack team was a pleasure to work with and ensured a smooth migration."

Steve Tuttle
Chief Investment Strategist

Signet Financial Management

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SECTION 4 Strategic considerations for RIAs

RIAs must navigate myriad strategic choices to ensure their firms' success.

 The decisions made regarding technology adoption, integration, and personalization influence operational efficiency and ultimately profoundly impact client satisfaction and long-term growth. When choosing a technology approach, RIAs must consider the following.

 

Choice is a powerful tool in the hands of advisors, enabling them to select solution that empower them to optimize workflows, streamline processes, and deliver exceptional service.

Whether through best-of-breed, all-in-one, or a hybrid approach, the key is to select technologies that enhance the advisor-client relationship, optimize workflows, and align with the firm's growth objectives.

The importance of customization cannot be overstated—it permeates every aspect of the wealth management process. From pre-trade compliance capabilities to portfolio modeling and reporting, customization enables advisors to deliver a seamless and tailored experience that aligns with the unique objectives of each client.


By leveraging advanced rebalancing capabilities, advisors can efficiently meet clients’ specific needs without compromising precision or efficiency. Moreover, by integrating customizable views and client reports, advisors can enrich client meetings and strengthen relationships through personalized insights and recommendations.

As technology advances, RIAs must future-proof their tech stacks by selecting solutions that are flexible, scalable, and open to integration with emerging tools and platforms. An application that is open with integration partners, are custodian-agnostic, and offer the flexibility of selecting stand-alone or seamless, all-in-one offerings are essential to future-proofing the tech stack. This approach not only ensures firms remain competitive but also positions them to adapt quickly to changing client expectations and market conditions.

For example, portfolio rebalancing and trading should fit within your WealthTech ecosystem and integrate with portfolio accounting, client relationship management (CRM), and other platforms to drive efficient communications between your teams. 

In addition, firms need to be able to get the most from their software. One of the most significant ways RIAs lose money in their businesses is by paying for software subscriptions and features they don’t need. Therefore, it’s crucial that they continually evaluate their use of features and services for which they are paying. 

"We knew our firm was growing, so we wanted to find a rebalancer to meet current and future needs without forcing us to use a one-size-fits-all process or a restrictive all-in-one platform."

Benjamin Webb
Director of Manager Selection and Implementation, Balentine

SECTION 5 Four key recommendations

1. Assess firm needs

Conduct a thorough assessment of your firm's current and future needs before deciding on a technology strategy.

2. Consider scalability

Choose a solution that can grow with your firm, whether through the addition of best-of-breed tools or by expanding the capabilities of an all-in-one platform.

3. Evaluate vendor support

Ensure that vendors, whether best-of-breed or all-in-one, offer strong support and integration capabilities.

4. Plan for integration

If opting for a best-of-breed approach, invest in solutions that offer robust integration to minimize the operational challenges of managing multiple systems.

"RedBlack has allowed our day-to-day activities to be pushed into operations to handle the last mile of trading and reconciliation, potentially saving thousands of person-hours per year."

Darrick Ganster
CIPM, Hirtle Callaghan

SECTION 6 Building for tomorrow, positioning for growth

The decision between best-of-breed and all-in-one solutions is not a one-size-fits-all proposition. It requires a nuanced understanding of the firm’s specific needs, strategic goals, and available resources. By carefully evaluating the trade-offs and potential benefits of each approach—and considering the advantages of a hybrid model—RIAs can build a technology stack that supports their long-term success.


In a rapidly evolving industry, the ability to choose and integrate the right tools is a strategic imperative that will shape the future of wealth management. RIAs that embrace this mindset, leveraging the strengths of best-of-breed and all-in-one solutions, will be well-positioned to deliver exceptional client experiences and achieve sustained growth. By empowering advisors with choice and prioritizing effective integration, wealth management firms can build robust, future-proof technology ecosystems that drive growth.

Sources

  1. Best-In-Breed Fintech Solutions  Favored  Among Advisors, FA Magazine, April 5, 2021.
  2. The Myth of Multitasking, Psychology Today, February 27, 2022.
  3. The Fallacy Multitasking, Psychology Today, March 12, 2022

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