It’s an unsustainable liability that directly hurts client service and growth. Modern investors now expect instant, holistic information from their advisors – 68% say their digital interactions with wealth management firms should match those of leading tech companies. Meanwhile, digital-native wealth platforms and robo-advisors are quickly gaining ground, with their share of the market projected to double from 9% in 2023 to 18% by 2026. The message is clear: sticking with the status quo will leave traditional firms lagging further behind.

Firms relying on outdated platforms are struggling to meet modern expectations. Clients now anticipate immediate access to clear, consolidated insights across their portfolios. Fragmented systems force delays and manual workarounds that frustrate both clients and advisors. Meanwhile, digital-native competitors deliver seamless access in real time, leaving firms without modern infrastructure appearing slow and disconnected.

Legacy data silos don’t just frustrate clients – they directly translate into missed business opportunities and inefficient operations. Without a holistic view of each client’s financial situation, advisors are essentially working with blind spots. It becomes far more difficult to identify cross-selling or upselling opportunities when information about a client’s insurance policies, brokerage accounts, and trust assets sits in separate databases that never talk to each other. The firm may have exactly the right solution for a client’s need, but if the advisor can’t see the need, the opportunity slips by unnoticed. Studies show the typical advisor spends barely half of their working hours on client-related tasks and only about 20% in actual client meetings; the rest is eaten up by administrative work. Beyond revenue loss, siloed systems slow everything down. Advisors and support staff often spend hours every week pulling data from multiple platforms and reconciling it manually just to answer routine client questions or prepare for meetings. This administrative burden isn’t just a minor inconvenience – it’s a serious drain on productivity that ultimately harms client service.

For instance, if a client asks about their total portfolio exposure, an advisor at a firm with unified data can answer in seconds. An advisor at a siloed firm might have to reply, “I’ll get back to you,” then scramble through spreadsheets and systems. Such delays and fragmented responses erode client trust over time.

For mid-sized firms, the combined effect of these data silos is unsustainable: lost revenue, higher costs, and a tarnished client experience. Continuing to operate in this fragmented way isn’t just a technical nuisance; it’s a fundamental business problem.

Fragmented legacy systems also introduce significant operational and compliance risks. When records are spread across disconnected databases, it becomes difficult to maintain accurate audit trails or meet regulatory reporting requirements. Inconsistent data can easily lead to errors or omissions, triggering compliance issues, audit findings, or misguided decisions. Older systems may even lack modern security measures, leaving sensitive data more vulnerable to breaches or downtime. In short, an outdated data architecture leaves a firm exposed to costly mistakes and operational failures.

However, the cost of inaction is almost always higher in the long run. Maintaining a patchwork of legacy systems carries significant hidden expenses with ongoing licensing and maintenance costs (including countless hours spent reconciling data). More importantly, the strategic cost is even greater. Every missed opportunity to deepen a client relationship or win new business because legacy systems couldn’t support it is effectively lost revenue. Over time, those losses dwarf the investment needed to modernize. A recent industry survey concluded that firms that are not actively modernizing their data and migrating to the cloud “risk falling behind”. Not surprisingly, 94% of wealth management firms now say data modernization is a top priority. What often goes unmeasured is the opportunity cost of doing nothing: lower client lifetime value from subpar service, and higher churn of both clients and employees. In contrast, modernization isn’t an expense; it’s an investment in the firm’s future relevance and resilience.

For those ready to act, Lumenalta works as an extension of your IT team to execute this modernization swiftly and securely, without disrupting daily operations. Our approach centers on creating a single, trusted source of data truth across the organization so that advisors and executives alike can gain a complete, real-time view of client portfolios. By integrating siloed systems and migrating data to a modern cloud-native architecture, we help firms eliminate tedious manual processes and reduce operational overhead.

That means launching new digital offerings faster, cutting costs with streamlined infrastructure, and uncovering opportunities hidden in disconnected data. Every step of our data modernization journey is aligned with measurable business outcomes. From strengthening data governance for easier compliance to deploying AI on unified data for predictive insights, we focus on initiatives that drive clear results. The outcome is not just an upgraded IT stack, but a more agile organization that can adapt to change, delight clients with personalized service, and confidently pursue new avenues of growth.