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You can have data without information, but you cannot have information without data.

Panacea comment for financial advisers and paraplanners

3 Nov 2014

In today’s day and age data collection is de rigueur – everyone is at it from the supermarkets who appear painfully deluded about the way we shop today, to the regulators that police our (and every other industry) who can sometimes appear not to have a clue what to do with the information, right up to the Secret Service of the most powerful nation in the world who believe it is necessary to capture every single communication that ever existed.

“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 when the data is seen, how does it get interpreted and used, and what good is data collection if nothing is ever done with the results and themes it generates? 

The answer of course is that there is no good at all in collecting data that you have no intention of using correctly. From a regulatory point of view, advisers need to collect a huge (and growing) amount of data from their clients; however satisfying compliance requirements is one thing but what about genuinely working (or mining) that data in order to drive more business or to establish patterns or trends which could ultimately bring in more clients and/or help develop the overall proposition. 

Even the smallest of advisory practices would benefit from an occasional look and analysis of the data they collect in order to see a) if it is ultimately fit for purpose, and b) to help draw conclusions about the road forward for that business. We work very closely with Equifax’s Touchstone Financial Analytics who are able to ‘number-crunch’ a huge amount of adviser-related data that supports not just providers’ analysis of the marketplace but also can help inform advisory firms’ own understanding of their strengths and weaknesses, the threats and opportunities.

Unfortunately, as Touchstone’s 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’m aware very few advisers are mining data effectively, apart from a small minority who have a sophisticated data management model,” he said. “I’m also only aware of one IFA consolidator which uses a client segmentation model as part of its due diligence process.”

So, it would seem that 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, Peter told me that in a recent data audit undertaken by the Financial Marketing Department, 40% 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 who would have had no chance of receiving them. Every single business should, at the very least, be undertaking a yearly data ‘cleanse’ to ensure such basic errors are omitted and the firm has the correct details.

To help in this regard, the Financial Marketing Department are currently offering every Panacea user 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. 

Therefore, let’s not collect unnecessary data neither should we let that data stagnate in our databases without either making any use of it, or ensuring that when it is mined it is as up to date as possible. Otherwise advisers simply become another profession that collects data just for the sake of it – at some point down the road we’ll not only forget what we wanted that information for but we’ll forget exactly what we’re in this business to achieve.   

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