The invisible cost of poor client data
Most advice and wealth management firms already know that poor client data creates inefficiency. Advisers waste time chasing updates, information gets duplicated across systems and servicing teams spend hours correcting records and manually rekeying data.
Those costs are the transparent ones, but the less visible cost is the damage that can be inflicted on the client relationship itself: a client receives a communication that is no longer relevant; they are asked to repeat information the firm should already know; different people hold different versions of their details or meetings begin with corrections rather than conversations. Such errors can build up over time, creating frustration but more importantly eroding trust.
For years, firms have been able to work around some of these issues because servicing follows a fairly predictable cycle where information is updated during annual reviews, then often, largely left alone until the next meeting.
But client expectations have changed, people expect more responsive communication and easier digital interaction with their adviser or wealth manager. Simultaneously, regulation is moving in the same direction, with Consumer Duty increasing the focus on ongoing value and client outcomes, while the FCA has consulted on moving away from fixed annual suitability reviews towards more flexible approaches based on client needs and circumstances.
The landscape has changed for good.
Historically, firms focused mainly on structured financial information like assets, income, liabilities or risk profiles, but today they are collecting far more information than they were ten or fifteen years ago. Clients are interacting digitally throughout the year, documents are shared online and information gets updated continuously. Such messages, servicing activity and engagement history now contribute to a much broader picture of the client relationship and help advisers deliver better ongoing client support.
The scourge of poor data also impacts on how advice firms prioritise clients internally. If information is incomplete or inconsistent, it becomes much harder to identify which relationships may need attention, which clients are disengaging or where support is needed most.
As firms build more flexible service propositions around different client segments, confidence in the underlying data becomes increasingly important.
Maintaining and interpreting accurate records
Increasingly, the challenge is not just maintaining accurate records but understanding what those records are telling you. A client who stops engaging with communications may be perfectly content. Equally, it could signal changing circumstances, reduced confidence or emerging vulnerability. Without reliable data and a complete view of the relationship, those signals can be easy to miss.
As firms move towards more flexible servicing models, confidence in the underlying data becomes essential if advisers are to make informed decisions about where time and attention should be focused.
We also have greater technology choice than we did ten years ago.
Most businesses now rely on multiple systems rather than trying to force everything into a single platform. The challenge is making sure those systems work together properly. Without good integration, firms end up with inconsistent information, duplicated processes and too much manual rekeying.
In this scenario, once people stop trusting the quality of client data, they often create manual workarounds to compensate. This is when spreadsheets appear, people may keep their own records or information gets checked repeatedly because nobody is fully confident that core systems are up to date.
So how can you improve data quality?
Large-scale data cleansing exercises have often struggled to deliver lasting results. People spend months fixing records manually, only for information to become outdated again as soon as clients' circumstances change.
Those advice and wealth management businesses making the biggest progress are usually improving data continuously rather than relying on large one-off clean-up exercises. Better integration and AI-assisted data capture make this easier than a few years ago.
Daily platform and provider feeds help keep portfolio information accurate without manual updates and clients increasingly update their own information through portals and apps. At the same time, some AI tools can structure information from meetings and conversations directly into client records.
Some firms are also now investing in centralised data environments to get better control of information across the business. Approaches vary but the goal is usually the same: to build a clearer and more connected picture of their client relationships and their business.
Good client data has always helped organisations operate more efficiently, what is changing is the impact this can have on the client relationship itself.
Advisers and wealth managers are trying to deliver more responsive and more personal relationships at a time when expectations continue to rise. This becomes very difficult when information is outdated, inconsistent or disconnected across the business.
Many firms still underestimate how much the client experience is shaped by the quality of the client data. Clients may not always say it, but they notice when firms know and understand them well - they also absolutely notice when they do not.
Over time, that becomes far more than a data problem for advice businesses.
How can firms turn better client data into stronger client relationships?
It starts with creating a connected view of every client. Moneyinfo helps advice and wealth management firms keep information accurate, reduce manual rekeying and use engagement insights to deliver more responsive, personal service. With secure integrations and dedicated support, we help firms build trust through better data.
This article is from an original piece by Tessa Lee, published on Professional Adviser.
You can read the full original article here.