Data should be your rocket fuel, why isn't it?

Financial Advisory

23 June 2022

Advisory DistributorsAIConsumer DutyDataFinancial AdvisoryPlatform providersRegulationTech

Facilitator: Martyn Laverick Expert: Barry Neilson


  1. Data is business critical
  2. There will be no point in collecting vast swathes of data if you do not know how to store, access and use it
  3. Firms need to start to look at this as an opportunity and not just another piece of regulation.
  4. Analysing data and what it can do for a business is a completely different skill set than that which sits in most firms today

Discussion points:

It felt like firms were not yet aware of the impact of this piece of legislation. Firms were not aware of the data they may need to get from their product and platform providers to meet the new rules. Because of this they were not aware if their suppliers would be able to support them or not

Some firms felt they had a lot of data but it was not easily accessible and not all in one place.

Firms still segmented clients by the traditional bandings of revenue, age, AUM etc.

A lively session where larger firms were frustrated that back-office systems did not talk to all platforms, all product providers, all Platform providers etc. An end-to-end process did not seem possible unless these firms changed their approach.

A common industry standard was requested to allow this to happen. It was pointed out that this had been tried before via Origo but not with great success

The commercials in investing significant sums of money into this by software providers just did not make sense. The IFA market is a comparatively small market that operates in such a huge variety of ways that it just was not viable to do.

Should the larger IFAs take matters into their own hands and develop their own IT systems to facilitate this after all it will add considerable value to their business and put them in control of their data.

Data Analysts for the future:

There was no evidence from the firms in the room that they had people on board that had the data analytical skills required going forward

It was discussed that these individuals would help the business drive new revenues rather than being seen as a cost to the business. An example was discussed of one larger Wealth manager that had a team of 4 data analysts and the results had been very positive.

It felt that this was something most firms looked at in a positive light. Looking at many of the highly successful IT driven businesses outside of Financial Services they had all invested significant sums in data analyst which had help firms better understand their customers’ needs and driven revenue. Hold this session again in one years’ time and it was felt that most firms would either have one on bord or be well on the way of recruiting one.

The Race to rich data:

It was suggested that since RDR Investment Managers had become disenfranchised and thus now needed to take more control about how they gather and use client data as they no longer can access this from IFAs

Out of the value chain individual parts it was felt that IFAs possibly lagged behind in the race to understand and collect their data compared with product providers and platforms

Examples of IFAs starting to collect new forms of data, such a Net Promoter Scores (client satisfaction) were given and how the output from these could be used to drive new business

Good examples around data governance framework and firms having a robust frame work were not very forth coming highlighting that there is still a lot of work to be done in this area.

IT or AI?

Firms were very keen to understand ow AI could help them within their advice processes and data collection

Views that client reviews and much of the para planning function could be enhanced by AI allowing greater servicing of client and new business

With more data being collected AI would be important to help firms understand their data better which in turn will help them identify new services that would add value to their clients.

Key Takeaways:

  • The overriding message that came out of the session is that firms need to get a tight handle on the requirements of Consumer Duty and then what data they then to need to collect. In turn this will help identify if their current platforms/providers are going to be able to support them on this
  • Greater standardisation and connectivity needed between providers, platforms and IT suppliers

One question business owners need to ask themselves given their average age and backgrounds is do they have the right skill set to identify just what is going to be needed in this area going forward