Padua Solutions co-founder and co-chief executive Matthew Esler said advisers need to “harness the power of data” to enhance the value proposition and “deliver superior outcomes” for their clients.
“Data-driven decision making is transforming investment strategies and platform choices in financial advice firms. By identifying and bridging data gaps and leveraging data insights, advisers can make more informed and effective decisions, maximising value for their clients,” Esler said.
He argued that advice firms need to invest more in boosting their data management and existing customer relationship management (CRM) system to access the benefits of data for their businesses.
“Advisers often encounter incomplete information where critical details are missing. To bridge these gaps, firms need to prioritise comprehensive data collection and regular updates through reviews,” Esler said.
“Integrating the CRM with data validation sources can also help create a holistic view of the client’s financial situation.
“By conducting a CRM diagnostic, for example, firms can identify and manage data gaps across their client base. A comprehensive understanding of the client’s existing position is essential for providing quality advice.”
He explained that data is also valuable in helping advisers deliver more personalised advice, allowing them to identify clients’ needs, goals, and risk tolerance, which “strengthens client relationships and trust”.
Additionally, Esler said that advisers can leverage data to enhance client engagement and help them better understand their portfolios.
“For instance, advisers can use data visualisation tools to present complex information in an easy-to-understand format, helping clients make informed decisions. Additionally, interactive tools and platforms that allow clients to explore their data and scenarios can increase their engagement and satisfaction,” Esler said.
In response to this, Padua has developed a “Research Manager” tool, a database of over 900 platforms and 25,000 investments, for its platform.
“We use data validation and verification processes to ensure the accuracy and relevance of this research for our adviser network. This enables advisers to evaluate and recommend platforms and investment strategies based on a wide range of features and benefits tailored to their clients’ needs,” Esler said.
He added: “Continuous education on the latest data trends, tools, and technologies is crucial for staying ahead.”
Appearing on an episode of The ifa Show in May, Esler said: “The biggest issue with poor data quality is the inefficiency it creates within the advice firm.
“Every CRM is like Swiss cheese. There’s holes all over it, there’s gaps all over it. Some are big, some are small. There’s no rhyme or reason to it.”
Speaking in May, he explained that advice businesses need to invest in their CRMs and improving their data quality to reap the benefits of a complete view of their practice.
“By uplifting those, creating that connectivity between the CRM and the portfolio management system and to the platform, it allows you to really increase the quality of the data. What we find is that the range in data quality ranges from 45 per cent up to 90 per cent, 90 per cent is the best we’ve seen, but most advice firms are in that 75 to 80 per cent range,” Esler said.
“By uplifting the data by that extra 20 to 25 per cent, they get full view of their practice or their firm. A lot of firms now are doing data visualisation … by having that 100 per cent data quality, it means that you’re actually visualising the entire firm, not 75 per cent of the firm.”
