How important is maintaining quality data?

When it comes to integrating technology into your practice, have you found yourself being drawn to the latest and greatest offerings? If so, you may be overlooking a valuable aspect of technology already within your reach and one that doesn't require immediate new investment: optimizing client data to uncover new opportunities.

Not surprisingly, advisors have a lot of data available to them within their CRM systems. Reviewing the CRM regularly is a great opportunity to enhance client outcomes and strengthen relationships.

Chad Druvenga, CEO of CBS Brokerage explains that while the industry conversation used to be around fee-compression, more recently advisors have been focused on offering ancillary services.

With advisors being asked to do more and more for their clients on top of building and maintaining relationships, expertise in data, Druvenga believes, is what allows them to communicate with their clients across a number of areas in addition to investments, like tax and estate planning.

“They don't have to be an expert in each one but they have to be able to talk and collaborate with their client and effectively answer the call in each of these different areas,” he says.

Druvenga says that reviewing data can help advisors identify clients who benefit from expanded solutions, while an in-depth review is required for advisors to completely meet their fiduciary responsibilities. Essentially, the quality of data could determine the fate of a modern-day advisor.

“The pros of looking at this data [are about] ensuring two things: one is making sure that there's nothing that's getting in the way of the goals and objectives of the client and, two; making sure any existing policies meet the client's objectives,” he says.

Looking at the broad scope of all ancillary services across tax, estate, and investments, Druvenga believes the data will help determine areas where clients can benefit from the inclusion or redeployment of an existing insurance policy.

While time is of the essence in the day of a life of an advisor, reviewing data also falls under time constraints. This is where Druvenga and CBS comes in.

“We can share the data, and help them mine and identify those opportunities,” he said. “It’s effective in minimizing that time constraint that the advisor has today, when they're being asked to do more for the same amount of revenue.”

Druvenga points to a Cerulli report released last year that found advisors who are interacting with their clients across multiple ancillary services are seeing “increased stickiness to those clients staying with the advisor long term.”

Additionally, integrating risk management, insurance and other ancillary services, Druvenga added, helps advisors effectively begin having conversations and ultimately, keep assets from one generation to the next.

“It's also a very effective door opener as business succession is happening at the RIA level with an advisor. Maybe handing a client or advisor from one generation to the next,” he said.

While pulling all of that data makes a case for a proper robust ancillary service and additional financial planning, Andrew Evans, CEO and founder of RIA Rossby Financial offers an alternative view. He says none of that data is going to help attract more clients or be more attractive to any client.

“How you utilize any of that data in a CRM is fruitless,” Evans said.

Evans highlights some examples of data he believes advisors should take note of. "How did I meet the client, how many times did I speak to the prospective client before the initial meeting? What were the costs of acquiring the client and what are some similarities between one client and others?

“You could really utilize that information to then build from there,” Evans said.

Evans asserts there are two types of data that are very important to an advisor.

“There’s do your job data, which at the end of the day, that's what regulators care about, then the other one is to find out all the similarities between your clients as to why these people are working with you, and how long it took for you to acquire them as a client,” he said.

“As a business owner, you need excellent strategy data. Formulate a strategy and get as much data as you can to execute on that strategy.”