In 2006, the phrase “data is the new oil” was coined by British data analyst and architect of the Tesco Clubcard, Clive Humby. This association between data and oil was based firstly on its’ lucrative value as a tool for amplifying revenue opportunities and secondly, the specific need for it to be ‘refined’ in order to reveal these opportunities. Big shifts in data science, privacy, financial services and a global pandemic later, the essence of this quote still rings true in 2021 with a few key changes to how we think about customer data insights.
Unlike oil, data is unlimited in both its quantity and its capacity to do both harm and benefit. The infamous case of Facebook and Cambridge Analytica’s data privacy scandal of 2016 immediately comes to mind. This was something of an “oil spill” that happens when data is not managed ethically. Despite the serious implications of that case, it did force us all to consider not only our duties to protect client data, but also the importance it holds for clients, accountants and advisers alike in creating new opportunities for growth.
To bring some insight into how data can be used to extend client relationships, I sat down with Inspired Money’s Director and Co-founder, Conrad Francis. With almost 25 years of experience in banking and finance, Conrad leads this boutique financial planning and advisory consultancy with a focus on innovative business solutions. I first wanted to know more about Inspired Money’s approach to obtaining and using client data in its practices. “We mainly use the myprosperity, or as we call it the Inspired Money, Wealth Portal,” explained Conrad. Inspired Money has partnered with myprosperity for five years now, managing over 800 client portfolios encompassing financial planning, asset protection, estate planning, investment reviews, life insurance, retirement planning, shares/funds investment and wealth creation through their custom myprosperity wealth platform. Conrad also mentioned the technology Inspired Money uses alongside myprosperity to evaluate client data, “We recently started using Pardot via Salesforce for our newsletters and marketing and that is also starting to give us some great data on our prospects and clients.”
Central to building deeper client relationships is the sense that clients feel understood by their financial adviser or accountant. It’s through the use of data that this can be achieved as Conrad explained, reflecting on his recent experience with a new client. “They happened to be an owner of an Accounting business. Having taken them through our usual onboarding process via the Inspired Money Wealth Portal (powered by myprosperity), we were able to overlay some simple assumptions prior to the first meeting and by the time we had the first meeting with the client, using their data and a few assumptions we showed them that they were on track to retire in 19 years. However, this assumed they were confident in their ability to generate their income for that period and that they were well enough to continue to work for that period… which exposed gaps in their personal risk plan. Upon further investigation, they expressed that they wanted to retire 9 years earlier than this. We were able to show them the impact of that decision via the “Goals” section in the portal which exposed an investment plan gap.” This is a great example of data being used to create value for clients whilst providing them with options. “The client’s decision was then very simple: work with an adviser or accept the gaps, a trade-off conversation that was made easier with the wealth portal. Furthermore, we are now in conversations with that Accountant about merging businesses because the benefit is something they believe in so much.”
Getting a clear picture of your clients’ financial world can be extremely time-consuming. Small mistakes in data recording can quickly escalate into bigger problems, so it’s essential that the correct tools are used to accurately collect data and alert early when anomalies and issues arise. Forging those data-led processes to understand clients is made simple through the right technology. For example, through powerful live data feeds, myprosperity’s new Midwinter AdviceOS integration securely consolidates client information across the two platforms, showing only the most accurate and up to date details. This maximises efficiencies and eliminates double handling of data, which in turn minimises the risk of human error. Advisers also have the ability to identify new client opportunities through myprosperity’s client surveys – a great way to check-in with clients about their current financial status. It generates conversations about additional services, creating further value for clients.
When asked what advice he would give to firms who are lagging behind and using manual data gathering tactics, Conrad had this to say, “Simply stop it. You are not serving yourselves, nor your clients by maintaining the manual processes – and you are potentially destroying the value of your business in the process.” I couldn’t agree more with this. If it’s ‘mined’ using the right tools, data is the single most important commodity for the innovative advisory or accounting firm’s decision-making. The modern client expects their adviser to be backing these crucial decisions with solid numbers. This being said, it can be tough to know where to begin with data or how to take it to the next level and make your systems work for you. If you’re interested in having a chat about data solutions for your business, get in touch with us today.
Head of Wealth
Karolina brings over 14 years experience in the Tech industry. Her previous role as a Field Partner Manager at MYOB, paved her way into the FinTech space. She joined myprosperity as employee number 8 and has played an instrumental role in driving growth since.