When you have multiple accounts and varied financial goals, trying to get a firm grip on your financial situation can be a bit like playing whack-a-mole — just when you balance one goal, it's time to check in on another.
To effectively manage your assets, you need to have a clear understanding of where you stand. That’s where aggregation comes in.
What is aggregation?
Let's say you have a mortgage with one bank, and your car loan is with a different bank. Then, you have a checking and savings with another bank, and your student loans are funded elsewhere. Perhaps you share an investment account with your spouse, and you also have a retirement account through your employer. All that can be a lot to keep track of.
Ultimately, aggregation helps you gain a wide lens view of your financial picture, so you can take everything into account when managing your money. Rather than checking on multiple accounts through numerous websites or apps, using an aggregation tool allows you to see everything in one place, saving you time and aggravation. Note that aggregation is not the same as consolidating your accounts, which is when you keep all your accounts with one institution. Aggregation tools allow you to look across your accounts and multiple institutions in one place.
When you work with a financial advisor, through Ally Invest Personal Advice, for example, you can access aggregation tools, as well as the expertise and guidance of a dedicated fiduciary, who’s obligated to act in your best interest.
Using an aggregation tool allows you to see everything in one place, saving you time and aggravation.
Seamlessly balance multiple accounts
As you amass savings, debts, property and so many other pieces of your complex financial puzzle, it can be easy to forget about the little things. But when it comes to developing a financial strategy, the details matter. If you’re working with a financial advisor, having the ability to see how your various accounts are allocated can help them work with you on making informed decisions, especially when emergencies pop up.
Saving for the future means straddling long-term and short-term goals, which can feel overwhelming. Having an organized, wide lens view can help you feel confident as you work through different challenges and objectives.
Aggregation can also assist you in balancing investment risk by helping you find potential gaps in one particular strategy, so you can strike a better balance. For example, if you’re taking a conservative approach in your 401(k), you may be able to take on more risk in your other investment accounts.
Collaborate on your finances
Aggregation is also a great tool for multiple people to work together toward financial goals. Partners or spouses can use aggregation to control their shared accounts, or it can be a helpful place to begin when couples have “the money talk.” It can also be an instructive tool for teaching kids finances. If you share accounts with your teenage children, for example, you can use aggregation as a platform to talk about money management goals and strategy.
Empower yourself with aggregation
Compiling your financial data in one central place is the first step in assessing your financial needs and pursuing your goals. The meaningful insights you glean from an aggregation platform can help you make informed investment decisions based on your own data, which helps remove the risk of emotional decision making.
Aggregation will help you gain a more realistic understanding of your entire financial situation, enabling you to set feasible goals and assess your needs holistically.
