Taken from this LinkedIn post by Dean Casey
Are you a wealth manager struggling with the following:
Your investment performance numbers are often wrong
Your client statements are inaccurate or late
Your tax reports are the work of fiction
The problem is your data. When your data foundation is shaky, everything built on top of it becomes unstable.
And you’re not alone.
So why is high quality investment data crucial?
Bad data leads to inaccurate calculations in your internal system and then even worse, your client reporting systems.
This leads to:
Client Frustration: Nothing erodes trust faster than inconsistent or incorrect reporting.
Reputational Damage: Word spreads fast in the financial world.
Client Exodus: Frustrated clients take their business (and assets) elsewhere.
It’s like building a house on quicksand.
So, what’s really happening behind the scenes
Investment data is often poorly structured, has gaps and sometimes with errors
Transactions, especially inflows and outflows, are incorrectly classified
Data cleansing processes don’t work properly
The outcome is that downstream systems and software relying on this data produces flawed results.
Ok, this is definitely a problem in my business. What now?
The way forward is to take back control
While you can’t easily fix all data issues overnight, you can take steps to understand the impact and mitigate the downsides:
Map you data ecosystem
• List all your investment data sources and providers
• Do they give you adequate data coverage for your downstream systems
Audit your data feeds:
• Identify the good, the bad, and the ugly.
• For problematic feeds, push suppliers to improve or consider changing vendors
Implement a data cleansing system:
• Create a standardized process for data cleansing and validation
• Leverage AI to help with classifications and error detection
Understand downstream impacts:
• Understand what systems and client reports are impacted by data issues
• For example, poor transaction classifications WILL compromise performance calculations
• Prioritize fixes based on business impact
AND MAKE SURE YOU HAVE THIS!
Create a Digital Dashboard:
• Get a real-time view of your investment data and other key metrics of your business.
• Spot trends and issues before they become crises
Remember, you can’t manage what you can’t measure.
Would you feel safe flying in an airliner that had faulty instruments?
Remember
Improving your data quality isn’t just about avoiding problems—it’s about unlocking opportunities.
Quality data is the foundation that allows you to:
Automate with confidence
Provide quality reporting to your clients
Enhace your reputation & stand out in a competitive market
Don’t let bad data ground your wealth management firm.
What’s your biggest data headache? Let me know in the comments below.
Stay tuned and have a great weekend!
PS Would you like me to do a free review of your data systems? Contact me to setup a call.