In 1086, the Domesday Book recorded English land holdings. Today, the increasingly widespread use of sophisticated computer-driven databases enables the manipul ation of personal and financial data to identify the financial circumstances, social groupings, interests, tastes and aspirations of individuals around the globe.
One data agency can provide detailed socio-economic profiles of over 40 million people in the UK alone, including marital status, number of children, credit ratings, salary and so on.
Such information is used as a matter of course by product providers to make informed decisions about the development of investment and savings products to meet current and emerging needs.
The computer has revolutionised the way in which data is held and analysed, to the extent that there is public concern about how it may be used or abused. But are the Big Brother fears valid?
This concern has lately spilled over into confidential client questionnaires and whether too much detail is being requested and computerised. This has prompted the office of the Data Protection Registrar to review whether CCQs fall foul of the Data Protect ion Act.
Separate from this, the financial services industry will shortly be on the receiving end of guidance on computer-held information for IFAs, appointed representatives, credit arrangers and product providers.
There is also draft legis lation before Parliament which will implement the 1995 European Data Protection Directive.
Mobile computing with the aid of notebook or laptop computers is likely to accelerate the gathering of personal financial information. Direct data-inputting will cut out paper form-filling.
There have been suggestions reported in the press that up to 30 per cent of small IFAs which collect client information on databases have not registered under the Data Protec tion Act. This is quite worrying and could bring justifiable criticism that some in the financial services industry are sidestepping the legislation.
At the very least, it could force the PIA to increase the risk ratings of those IFAs concerned.
It is vital that we all abide by the spirit of the legislation and not just by the strict letter of the law, otherwise, the financial services sector may suffer a backlash, maybe having an impact on its marketing activities.
We must make it absolutely clear to the public that the financial fact-find is an essential part of the advisory process undertaken by an IFA and that completion of a CCQ is a valuable means of helping to identify a client's financial position.
The CCQ is the foundation of appropriate client strategy and enables an IFA to meet compliance requirements.
Few clients are likely to object, since it is clearly in their best interest, but this does not necessarily encompass exten ded use of the content.
It can be argued that analysis of consolidated CCQs is also of benefit to clients, in that it provides valuable input when designing financial products and services. Running alongside this is the possible effect of new or retrospective legislation on the marketing of products and services in the financial sector.
The huge potential of the internet must not be underestimated, not just in the UK but globally.
Not surprisingly, the Data Protection Registrar is looking at the use of data gathered from clients and prospects over the internet. Controls for selling financial services by electronic means are also a hot topic among regulators in Brussels.
There is little doubt that cross-border marketing and selling of financial products will become commonplace. An increasing number of providers are truly international.
My worry is that piecemeal legislation might harm the ability of the UK financial services industry to market itself effectively, especially if some countries have a more lax attitude to data collection.
The UK has a good record of harmonisation of EU legislation but, sadly, this cannot be said of all EU members. My plea to Brussels is for a level playing field.