The decision to buy or build systems can make or break a growing wealth management firm. A wrong choice wastes time, money, and trust. A right choice builds speed, control, and resilience — not just internally, but also with clients, partners, and regulators.
For most firms, the real question isn’t “Should we buy or build?” It’s “What’s worth owning, and what’s safe to outsource?” That answer depends on how your team operates, how critical a function is, and how much risk you’re willing to carry, suggests Youssef Zohny.
Why Buy vs Build Is Hard in Wealth Management
Integration Is Non-Negotiable
Wealth management platforms don’t work in isolation. They must connect with custodians, CRMs, performance reporting tools, compliance systems, custodial feeds, and billing software. If a new system doesn’t integrate well, it creates manual work and data risk.
Buying tools can be fast — but without native integrations, your ops team gets buried in spreadsheet patches and duplicate entries. Building gives more control but requires owning every API and dependency.
For core systems like portfolio accounting or trading engines, clean integration isn’t a nice-to-have — it’s mandatory. If it doesn’t sync, your team’s flying blind during rebalancing or reconciliation.
Compliance Adds Pressure
Wealth management runs under a tight regulatory lens. SEC audits, fiduciary standards, client disclosures, and data security shape every decision.
Buying from a vendor with proven compliance workflows can save months of legal and audit prep. But when you build internally, your team owns every control and every gap.
In a 2023 report from InvestmentNews, 68% of RIAs said compliance and regulation were the biggest barriers to changing systems — not cost, not features.
That’s why this decision can’t just be about speed or price. It has to start with trust and end with proof.
What Makes Sense to Buy
Buy Infrastructure, Not Differentiation
Some systems are critical — but don’t set your firm apart. Rebuilding them is usually a mistake.
Common examples:
- Role-based permissions and user controls
- Trade execution pipes and custodial integrations
- Standard audit logs and documentation trails
- Client communication compliance archiving (e.g., text/email monitoring)
- Identity verification and access management
These tools solve problems that every wealth firm shares. If there’s a stable vendor with proven uptime and compliance coverage, that’s usually a smart buy.
Buy to Accelerate Learning
When testing a new offering — like digital onboarding or real-time financial planning — buying a vendor tool helps you move fast and learn. It’s more important to validate the workflow than to perfect it on day one.
But tread carefully: if your team starts patching vendor limitations or ignoring core use cases, it’s a sign you bought too high in the stack.
What You Should Build
Build What Sets You Apart
If a system touches your core value — your strategy, your process, your client promise — build it.
Examples include:
- A proprietary financial planning engine
- A decision engine that reflects your investment philosophy
- Custom workflows that drive how your team services HNW clients
- Internal dashboards that track what you define as success
If it drives margins, client loyalty, or firm identity, it’s not a plug-and-play feature. It’s something to own.
Build When Fit Breaks Flow
Off-the-shelf tools often check 80% of boxes. But the missing 20% creates friction: edge cases, manual work, or regulatory concerns.
If your team keeps saying, “This isn’t how we actually do it,” it’s time to build. For wealth firms, that might look like:
- A billing system that aligns with household-level fee caps
- A CRM workflow tailored to trust and estate planning
- A rebalancer that factors in complex tax lots or ESG rules
The better the fit, the stronger the adoption. That’s where ROI hides.
The Hidden Costs of Both Paths
Buying Means Vendor Risk
Even good vendors can shift pricing, change direction, or get acquired. If you don’t plan for those outcomes, you’re locked in.
Before buying, ask:
- Who owns your data?
- Can you export cleanly — and fast?
- What happens if the vendor sunsets the tool?
Always assume you’ll need an exit path — even if things are going well today.
Building Makes You the System Owner
If you build, it’s yours forever. That means:
- Writing and maintaining documentation
- Updating for every compliance rule
- Training new hires
- Supporting edge cases, bugs, and failures
If you don’t have the headcount or culture to support that, your internal tool will become technical debt faster than expected.
The Smart Middle Ground: Build on Top of What You Buy
Many of the best wealth management teams combine both paths.
They buy for stability. They build for differentiation.
Examples:
- Buy: Portfolio accounting system
Build: Custom performance views for family offices - Buy: E-signature and document vault
Build: Internal checklists and pre-fill logic for onboarding - Buy: Compliance supervision tool
Build: Your own alert workflows tied to how your advisors operate
This hybrid model reduces long-term risk and speeds up time to value.
Questions to Ask Before You Decide
- What happens if this fails under pressure — who takes the blame?
- Can this scale cleanly if our client count triples?
- Is this something clients see and care about — or just us?
- Who handles audits, testing, and documentation?
- Are we building because it’s better, or just because we’re frustrated?
If you don’t have strong answers, pause. The wrong system can slow your firm more than any competitor.
Final Thoughts
In wealth management, systems aren’t just workflows — they’re your foundation.
Buy when trust, stability, or time-to-value matters. Build when it touches the way you create client value.
Don’t decide in a silo. Talk to ops, compliance, client service, and finance. Test assumptions in real workflows. Look at what scales and what protects.
Great systems feel boring in the best way. They don’t break. They don’t require workarounds. And they build trust quietly — every day.
That’s how great firms grow.
