Photo by Lukas Blazek
When people think about wealth management, they usually think about returns, performance, investments going up and down, and basically all the visible parts that people see – and that sometimes make some pretty interesting headlines. But the truth is that none of that’s going to work without one very simple thing happening under it all – reliable data. And if the data isn’t clear, accurate, and up to date, then every decision made using it is going to be unclear, inaccurate, and behind the times… And you might not know about it until it becomes a real problem. With that in mind, let’s take a look at why reliable data matters so much.
Small Inaccuracies Add Up
If something goes slightly wrong in wealth management, it can be down to one catastrophic error that takes everything down with it, but although that might be what you think of first, that tends to be quite unusual, and most of the time, it’s little things that no one’s paying attention to that causes all the problems – especially when there are lots of them all added together.
You might not even think it’s a problem at all to have a few small inaccuracies slip through the net and not get caught, but what happens when those small inaccuracies build up over weeks or months? What happens when decisions are made based on information that’s slightly out of date? That’s where the real issue is, and reliable data prevent that from happening before it even starts.
Growth Means More Complexity
When portfolios get bigger or more diversified, the amount of information that needs to be monitored is going to increase as well, and there are just more things to look at, both inside the business and outside.
If that data is spread across systems that don’t talk to each other and are essentially disconnected, someone has to bring it all together manually, then double-check it, then make sure one set of numbers matches another, and so on. And when that’s happening all the time, it’s going to take lots of time and, crucially, increase the chances of there being human error involved. If you’ve got reliable systems to take that repetition away, it’s all going to be much more accurate.
Transparency Means Confidence
Clients today expect to be able to see what’s happening with their money clearly and quickly, and they definitely are looking for vague summaries or delayed explanations – they want things to be easily seen and totally transparent.
If you’re working in a technical environment, you might want to create a block explorer so users can see their blockchain transactions nice and clearly rather than having to dig through all the raw data themselves. And the principle is the same in wealth management – if information is there and can be seen and used, people are going to trust you more, and they’ll feel a lot more confident about the decisions that are being made (or that they’ve got to make).
Reliable Data Supports Better Decisions
You’re still going to want your wealth advisor to have experience, judgement, and understanding, of course, and data isn’t going to (and can’t) replace that, but judgement that comes from unreliable information is really risky, and even the best advice can only be as strong as the numbers behind it.
So when the data is clear, it’s much easier to assess risk properly because you’ll have all the information you need to know what’s what. And you’ll be able to plan better because you’ll be able to see where you are and where you can go taking the various paths that might be open to you – and you can be sure you’re being pointed in the right direction.
Mistakes Get Bigger As Money Gets Bigger
When you’re dealing with smaller amounts, errors are frustrating, but they can be fixed fairly easily, or at least they don’t cause major disasters. But in wealth management, the numbers involved can be huge, and that means that even a small error percentage wise can still be a lot when it comes to the numbers, and it can have a big, long-lasting, negative impact.
Reliable data systems can help reduce the chance of repeated mistakes (which is a big issue) because they’re going to follow the same logic every time, and they can’t forget anything, and they don’t rush anything either. It’s that kind of consistency that’s so important and that can make things a lot more accurate.
Compliance Becomes Easier To Manage
Wealth management isn’t just about the results and performance, although it might seem that way – you’ve also got to think about regulation, reporting requirements, and making sure everything’s documented in the right way – and that side of things can get pretty complicated very quickly if the data isn’t organised. You’ll find that every transaction needs to be recorded properly, every adjustment has to be traceable, and every report needs to match the underlying numbers.
If the data isn’t reliable, compliance gets very stressful because you’re constantly double-checking and reconciling things at the last minute. But when systems are accurate and consistent, that pressure is going to reduce a lot because your reports always come from the same trusted source every time, which means fewer surprises and a lot more control.
It Save Time You Didn’t Realise You Were Losing
A lot of time in wealth management does tend to get lost in checking things, which might sound strange, but when you stop and add it all up, you’ll see it’s true – you’re spending a lot of time just making sure things are right.
Reliable data means you don’t have to check things as much because you can be more confident that it’s all correct in the first place, and there’s a lot less you need to manually verify. And then you can use the time you save to build and plan instead of having to do so much background admin all the time. Over time, that can make a really big difference.
