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Derek Bradley: Drowning in data

Regulation forces advisers to collect a huge amount of client data but it is not being used effectively

Derek Bradley Cut Out Peach

In today’s day and age, data collection is de rigueur. Everyone is at it, from the supermarkets that appear painfully deluded about the way we shop to the regulator that polices our industry, sometimes appearing not to have a clue what to do with the information.

“We will need to see the data” has become a phrase that resonates around every single office in the land. The big question is what happens once the data is seen? How is it interpreted and used? After all, data collection is no good if nothing is ever done with the results and themes it generates.

From a regulatory point of view, advisers need to collect a huge (and growing) amount of data from their clients. But satisfying compliance requirements is one thing. What about genuinely working that data in order to drive more business or to establish trends that could ultimately help develop the overall proposition?

Even the smallest of advisory practices would benefit from an occasional look at and analysis of the data they collect in order to a) see if it is fit for purpose and b) help draw conclusions about the road forward for that business.

We work very closely with Equifax’s Touchstone Financial Analytics, which is able to number-crunch a huge amount of adviser-related data. This not only supports providers’ analysis of the marketplace but can also help inform advisory firms’ own understanding of their strengths and weaknesses, threats and opportunities.

Unfortunately, as Touchstone intermediary director Peter Welch recently pointed out to me, there are very few firms in the advisory space actively seeking to understand the data they collect and use it in an effective manner. 

“As far as I am aware, very few advisers are mining data effectively, apart from a small minority who have a sophisticated data management model,” he says.

“I am also only aware of one IFA consolidator that uses a client segmentation model as part of its due diligence process.”

So, it would seem even those firms that might consider themselves at the top of the tree in terms of their advice proposition are not getting to grips with their data.

To show how poor management of data can become, Welch pointed me towards a recent data audit undertaken by the Financial Marketing Department, which found 40 per cent of client records supplied to them were returned as either moved, gone away or passed away.

This is the basics of data. One wonders how many communications continued to be sent to those clients that would have had no chance of receiving them. Every single business should, at the very least, be undertaking a yearly data cleanse in order to ensure such basic errors are omitted and the firm has the correct details.

A data audit is something that would be particularly helpful for all firms expecially  those considering selling their business in the near future and those who might be moving non-advised clients into an advised proposition. 

In order to achieve this, advisers need to know from the very outset that their data is as clean as it can possibly be.

Therefore, let’s not collect unnecessary data. While we are at it, let’s not let data stagnate in our databases without either making use of it or ensuring it is as up to date as possible. Otherwise, financial advice will simply become another profession that collects data just for the sake of it. 

At some point down the road, we will not only forget what we wanted that information for but we will forget exactly what we are in this business to achieve.   

Derek Bradley is CEO of Panacea Adviser 



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  1. Derek Bradley ceo Panacea Adviser 20th November 2014 at 9:56 am

    To help in this regard, the Financial Marketing Department are currently offering every Panacea community member a free data audit – – which will assess the client data and help understand their profiles.

    All you have to do is quote the code ‘PAN14’ to secure the audit – something which would seem to be helpful for all firms but particularly those perhaps that are considering selling their business in the near future or those who might be moving non-advised clients into an advised proposition. In order to achieve this, advisers need to know from the very outset that their data is as clean as it possibly can be.

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