Data Management to Drive Better Human Interactions and Decision-making

Purpose-Driven Culture Around Data Should Steer Wealth Management. Here’s Why.

One of the great ironies of our data-saturated environment is that – while financial advisors have amassed more information about their clients – the data they’re collecting isn’t always being harnessed properly, or in a manner that best serves their business. In fact, tech providers that support meaningful data management at financial firms have found that data is often siloed or isolated in outmoded legacy platforms.

Because real data is constantly in flux, data is easily prone to becoming isolated and obsolete. Old phone numbers and addresses are replaced with new ones as clients change jobs or get married and start families. Data also sits in different pieces of software that often aren’t integrated across the firm.

Without the right kind of integration, financial advisors struggle to put together a complete and updated picture of their client, and different teams are rarely on the same page – which impacts efficiency and ultimately, the customer experience. Dynamic data powers possibilities, but if it’s not being captured, validated or processed thoughtfully, wealth managers can’t gain actionable insight or grow their practice.

A lack of intention and purpose is usually the culprit for why unrefined data often sits idle on servers at wealth management firms. Without a company-wide culture of better data management, data happens accidentally, rather than intentionally. Valuable information that can move the business faster is there, but advisors and their teams aren’t leveraging that data to deliver a better experience for their clients or make smarter business decisions.

Encouraging a culture of capturing and maintaining dynamic data starts with people who champion data, preferably across the firm and among the senior leadership. These data champions are then responsible for ensuring their colleagues not only maintain good data practices but also understand how data affects everyday operations.

Even a small decision about data can have a tremendous impact on the direction of a wealth management firm. This butterfly effect can take place on many different levels. Updating a client’s salary, for example, can change the way their account is segmented, the resources and services available to them and the trajectory of their financial plan. Put another way, capturing, processing and maintaining living data can help advisors gain valuable insight into clients and transform the advisor-client relationship.

Even small decisions can have a tremendous impact

Capturing data means compiling and prioritizing it for end users – then further refining it through steps that include validating, processing, analyzing, storing, maintaining and archiving information across the life cycle of an account. The initial point of capture is the foundation of good data, and a firm must commit to collecting quality data that’s complete and without information gaps. Even with prospective clients, firms would be well advised to promote a policy of obtaining as much needed information as possible, if they are to fully secure enterprise data of high value.

Data management may sound like yet another technology-related task wealth managers need to tackle (and can therefore be easily deprioritized) but a closer look reveals its true purpose: to enable better human interaction and provide the right information that allows the best decision to be made, every time.

Adrian Johnstone, President & Co-Founder, Practifi

Too often in the industry we get stuck thinking only about what technology can do for us and not enough about what it can enable us to do. Technology, including dynamic data, should be an enabler of human behavior in wealth management—helping advisors do things, better, smarter and faster. It shouldn’t be about flooding advisors with information or overwhelming their team and detracting from their business’ potential.

It’s about making sense of data streams, and making sure it’s secure, accessible and contextualized for the advisor. With better data management, advisors can build their business with intent – and better power the human possibilities of wealth management.

Adrian Johnstone is the president and co-founder of Practifi, a performance optimization platform purpose-built for the wealth management industry.

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