Is data quality on your RaDaR?

Data management will play a crucial role in ensuring advisers are RDR ready.

Certainly, the need for greater data transparency and access to client information may, in the future, require advisers to submit all transactional activity to the FSA or an equivalent organisation and client reviews will move further into focus. This could put greater pressure on advisers to allow clients access to their portfolios and to view past performance, as well as other documents held by advisers. These requirements can only be met by being able to efficiently manage company and client data.

CRM tools are at the heart of the RDR and need to be spring-cleaned in preparation for 2012. Most advisers manage their client data using the database provided by their technology provider. A good, clean database can save a huge amount of time, freeing hours to focus on servicing clients and winning new business.

Reliable data is also necessary to segment client activity efficiently and to allow advisers to identify and spend more time with those clients who are likely to generate a higher revenue stream. This does not mean ignoring the remaining clients, but advisers need to be able to match service proposition to client value. In a competitive environment, increasing your understanding of your clients is one of the aspects advisers have to focus on to ensure satisfaction in their service proposition, retain business and ultimately turn around profit.

Another consideration for adviser firms is not only to improve data quality, but also to decide who should be involved in the data maintenance process and how this process can be automated to maximise efficiency. With advisers, paraplanners and administrators all having access to a CRM database, guidelines need to be put in place outlining basic housekeeping rules to ensure that data is not duplicated, lost or amended without cause. It is also advisable to restrict who can access, add, edit and delete data.

Let us now define what good data should look like. High data quality ensures a more effective business strategy. It provides a detailed level of information about individual clients, providers and plans needed to make the right decisions. To ensure a quick and accurate insight into a client’s portfolio, data has to be consistent and relevant. Aside from being misleading, incorrect or irrelevant data can also clog up a database and slow down the advice process.

In the context of spring-cleaning a CRM database, it is important to identify and remove dirty data. Duplicate entries and entries carrying inaccurate information for a client or provider waste time and cause confusion.

Your CRM database should have an inbuilt set of tools allowing you to interrogate your data easily. Key search criteria will include duplicate core data, data no longer in use and missing information. Being able to export the results of the searches into a spreadsheet provides another powerful set of tools, enabling further interrogation of data through sorting, mining and use of pivot tables.

Old data needs to be updated or removed, operating on the old adage of less is definitely more. Data can always be re-keyed, but working with a slim and up-to-date database is more efficient than dragging a bulk of information with you which is both time-consuming and can create additional work at a later date. Improving the quality of existing data is key to ensuring consistency, compliance and accurate management ­information.

When adding new entries, free-to-use websites may prove a useful resource. Examples include Policydetective, which helps to find insurers taken over, and the correct address of providers. Fundlistings, another website which is free, lists MEX codes of all listed funds and may also prove a useful resource. Some technology providers, such as 1st Exchange, also offer services to update standing data automatically by using a central hub, ensuring consistency in base data.

Every CRM database requires regular upkeep to ensure currency and accuracy, but the question remains: does the time and money spent on improving the quality of data translate into tangible business returns? The answer is emphatically yes. Good quality data will ensure a more streamlined business model which will be characterised by improved client segmentation and which will add value to your existing client database and free more time to win new clients.

In the run-up to RDR, with the recent recession followed by continued economic uncertainty, there has already been some consolidation in the adviser market. This is likely to continue, with as many as 30% of advisers predicted to throw in the towel, according to a recent survey by Ernst & Young. For those advisers looking to retire or make a career change, the successful sale of a business could ultimately hinge on the quality of the data.

A transparent and clean CRM system will make the adviser’s business stand out from the crowd and draw the attention of potential buyers. Clean data is imperative when evaluating the worth of your business and advertising this to interested parties. The longer you wait, the more difficult and time-consuming it will be to get your data in order. An investment now will pay dividends in years to come in terms of efficiencies and profit.

Take advantage now of all the help you can get to achieve this crucial competitive edge.

Chris Baigent-Reed, head of client engagement for 1st Exchange, says spring-cleaning your CRM database is essential in the run-up to the RDR