Software for retrieving data from compartmented data silos to aid in real-time wealth management investment reporting.

Data. It seems that every industry becomes more data-dependent every year. It’s no different in our industry either. It’s obvious that world markets have been awash in data for decades—that’s how markets work. But now it’s about more than just market data; every aspect of wealth management depends on data at every level of customer relations.

Where is Your Data?

Every wealth management firm deals with a lot of data every day. There are several applications that go into performing the daily, weekly, quarterly, and yearly tasks that occur in every firm. How you deal with that data—how you make it all work together—can impact your success. There are several compartmented sources of data in our business:

• Customer Relationship Management system
• Customer proposal system
• Portfolio Management system
• Trading systems
• Firm Operations Management systems
• Reporting Systems

All of those systems have their own data protocols and repository systems, and none are really designed to work together. If you envision the work performed in wealth management firms every day—prospecting for new clients, new client meetings and proposals, established client reporting, internal firm management tasks—all of those activities require interfacing with data. Each of these tasks requires the retrieval, analysis, and presentation of that data in some way.

Any time reporting needs to take place, invariably, that data needs to be extracted and manipulated. For example, client reporting involves dealing with the customer data in the CRM system, the portfolio management system, the trading platform, and finally, the assembly system for the actual report. Add to that the opportunity to add your own market commentary, specific to the client’s portfolio goals or preferences. It all requires manual labor to gather that data and get it to a useable format.

The Scale, Integrity Problem

As firms grow with new clients, the data problems also mount. Reporting period deadlines are filled with hours of moving information manually from one platform to the next, usually ending in a spreadsheet. At the spreadsheet level, the data must be manipulated once more, to get it into an easy-to-read reporting format.

It’s easy to see the problem—the more clients under a firm’s management, the more time must be spent dealing with the task of moving data around.

The other aspect of this data problem is integrity.

Each of the applications mentioned earlier uses data in a different way, or in a different format. Therefore some translation of data must also take place. An easy way to think about this issue is in translating international market data into American dollars.

But that’s also oversimplifying it—data storage and nomenclature can differ from application to application for values that are essentially the same. For example, things like client preference tables, portfolio lookup tables, and firm CRM data systems may store the same information in different formats.

Every time a chunk of data is translated or manipulated, there is potential for error. The introduction of errors, no matter how they happen—through human error, or intentionally—is certainly a compliance problem, and pose a major liability to any wealth management firm trying to set itself apart as a steward of their clients’ best interests.

Data should be controlled from its original source, all the way through the process to the client report and into the firm’s own central data warehouse. If you ask any firm’s compliance officer, they’ll tell you that data integrity is a major concern.

The Wealth Steward’s Highest & Best Use

“Highest and Best Use” is a real estate valuation term that determines whether a piece of real property is being used to its best and fullest extent. Just as real estate is an asset, so, too, is a wealth advisor who’s truly a wealth steward. A wealth steward who is being used to his highest and best use is in demand and is market savvy. He has a consultative partnership relationship with his clients. That’s where his time is best used, and it’s in the firm’s best interests to have him in that role as much as possible.

When so much behind-the-scenes data work goes into conducting every-day business, every firm should be looking for solutions that can allow wealth stewards to spend their time doing exactly that. First Rate ties all your firm’s data sources together by automating the collection and aggregation of data. It’s also the central hub of client data and report generation.

First Rate solutions allow users to collect data autonomously, and design custom reports that are client-specific and goal-centric. It allows wealth stewards to work at their highest and best use—meeting with clients, using superior support materials and reports, designed specifically for them.