Texas Securities Board Issues Guidance on Use of Data Aggregation Services by Investment Advisers

The Texas State Securities Board issued guidance for investment advisers that use data aggregation services and third-party platforms in their advisory practices.

The July 23 notice came in response to the growing use of these technologies by financial professionals to consolidate client data and provide a more comprehensive view of clients’ financial positions. According to the TSSB, data aggregation allows advisers to offer enhanced services, including management of held-away assets, such as employer-sponsored retirement accounts.

The guidance affects advisers with clients in Texas.

The TSSB emphasized that while these tools can expand service offerings, investment advisers must remain compliant with legal and regulatory obligations. Its guidance outlined key areas in which due diligence is necessary, including understanding the nature and scope of the services, reviewing agreements and policies, evaluating cybersecurity practices and ensuring proper recordkeeping.

Advisers are encouraged to conduct thorough assessments of the platforms they utilize, particularly in relation to access rights, data collection practices and potential custody implications. Additionally, the guidance highlighted the need for clear client disclosures, including risks associated with the use of data aggregators.

The TSSB also reiterated advisers’ fiduciary duties when managing client accounts through these platforms: Recommendations must be suitable; fees must reflect the level of service provided; and comparisons should be made between adviser-managed and employer-provided services for held-away assets.

Pontera, a platform for secure management of held-away assets, lauded the TSSB’s best practices in what is considered a win for financial data-aggregation firms. The company characterized the move as a step toward greater alignment between innovative fintech and regulatory priorities centered on investor protection and responsibility.

The company also pointed to a growing demand in the 401(k) advice market, in which many investors seek to have their personal advisers manage the investment allocation of employer-sponsored plan retirement accounts. 

Pontera approved of the guidelines for “providing clear guidance that prioritizes investor choice and protections,” said Ben White, Pontera’s senior director of public policy, in a statement. “Pontera’s technology is purpose-built to empower advisers to deliver comprehensive planning, while upholding the highest standards of security and transparency. We believe this guidance affirms the value of responsible innovation in financial services that benefits American workers.”