One of the most often overlooked areas of financial planning when it comes to improving the overall efficiency is the quality of data and record-keeping, according to Fiducian’s Matt Wadey.
Most financial services institutions take a strategic approach to the management of data, often governed by strong regulations aimed at ensuring data integrity, completeness, availability and security.
Financial planning is no different, and while the regulations may not be as onerous as, say, for a superannuation provider, there is a lot to be gained by taking a similar approach as to how you handle and maintain your data.
The Future of Financial Advice (FOFA) changes are most likely already a key driver to this end.
Implementing a standard process and style guide which includes naming conventions, detailed descriptions and categorisation of various client correspondence and documentation will save time and effort in the long run, particularly when trying to locate individual records and documents or report on specific client segments.
For example, if you were to create a naming convention for all client records created by inputting the surname first, followed by any given names the client(s) may have, this will ensure that your entire client listing is displayed in sequential alphabetical order by surname, which in turn will make locating a specific client record a seamless process.
The categorisation of any client correspondence such as advice documents, fact-find documents, files notes and email correspondence should also be a priority. Each record should have an accompanying description which allows the user to easily identify what the document relates to and when it was produced.
Having this process in place will not only allow the adviser and support staff to easily locate files within a short space of time; it will also make things easier for external stakeholders such as compliance or audit entities when they are undertaking reviews.
By ensuring the categorisation and descriptions are complete you won’t need to waste hours trying to locate specific records relevant to the review.
Further efficiencies can be gained through the correct segmentation of a client base. This will allow you to specifically report on and target certain segments when looking to implement marketing strategies in order to increase the level of business you are generating.
Categorising the client base into various classes or status levels upon creation, will ensure that they are immediately segmented into the correct area and can then be targeted when necessary for certain marketing campaigns, mail outs, offers etc.
The level of segmentation which should be undertaken should vary from practice to practice and be dependent on the business model which is in place at the time.
Prior to the implementation of such a process some detailed thought is required in regards to how far and how detailed your segmentation need be. Ideally it should be easy to understand and as simple as possible, avoiding any additional layers of complexity.
Given the new FOFA world of fee disclosure statements (FDS) is almost upon us, ensuring the quality of data you have at hand is paramount. Segmentation of your client base will play a vital role in defining the services which are available and have been provided to your clients.
If the quality and accuracy of data is there and it is organised and categorised in a consistent and logical manner, there should be no issues gathering the necessary data to complete the FDS for your client base by the relevant July 2013 cut-off date.
Another area where practice efficiency can be improved relates to the level of complete data that is available.
The more data you have on hand the easier it will be to obtain a clearer picture of your client’s situation and as a result provide them with quality advice.
Therefore it is imperative to identify which fields should be entered at all times and then make these fields mandatory in your data entry procedures.
The software you use will mandate that certain data is entered to some level, but going the extra step and ensuring your data is complete and accurate to a high standard saves on follow-up time with your support staff and the client.
Gains in processing time will most certainly outweigh the time it takes to implement the style guide, categorisations and naming convention processes.
In addition to this, if the processes and naming conventions are documented and readily available to all staff, consistency will be achieved and training new staff members will be made easier as a result.
Ultimately, it is most important to recognise that your data is only as good as what has been entered.
If you take the time initially to ensure that you have the correct processes, naming conventions and categorisations in place and your data is complete, accurate, displayed and organised in a logical manner, this initial short-term pain will most certainly be rewarded in the long term.
Matt Wadey is application and training support analyst at Fiducian Portfolio Services.
