Quick! Grab Your Data!

Monday, December 28, 2015 19:22
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Quick! Grab Your Data!
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Tags: CRM | succession planning

You can’t stop your broker-dealer from losing your business, but you can prevent your business from losing its data.

  
Independent firms have always operated in a difficult, shifting environment.  By their very nature, both independent BDs and RIAs have set out to change the way financial services are delivered.  As the years go on, their ever-growing success is redefining financial services from the ground up. Affiliating your business with one of these firms make you part of a revolution… and revolutions are all about change. 
 
That change manifests in many ways among independent firms- drifting business models, executive turnover, and all sorts of changes to ownership.  It shows up as an increased likelihood that seemingly stable firms will go off course due to unforeseen regulatory problems or unanticipated decisions by management.  Most of all, it drives advisors to transfer affiliation between firms in order to ensure a profitable partnership.
 
That transition to a new affiliation is painful and definitely not something most advisors want to experience, but it’s often something they simply have to do.  Even if the broker dealer stays true to its general form, the various elements that made it the right fit for an advisor’s business are unlikely the remain the same over the long term.  Advisors will eventually, sometimes multiple times in their career, find that staying is unprofitable.
 
The Promise of Data Ownership
That means testing the firm’s promise that you own your clients, and all the data accumulated during your relationship, sometimes at the very moment when the BD/RIA is least willing or capable to make good on those promises.  A firm undergoing a fire-sale to a competitor, facing regulatory scrutiny, or simply having grown beyond the vision of its founders is going to be reluctant to hand off your client data… even before you consider the technical challenges they face.
 
Even if you are at a firm that allows your business to own your client data and you’re lucky enough that whatever causes you to leave doesn’t lead them to revoke that privilege, it’s possible that they simply won’t have your clients’ information in a portable format.  Firms choose technology solutions that work well within the firm itself, not tools that will work well once Advisors take the data and leave.  Their de facto control of data inside of proprietary solutions and enterprise wide technology contracts is an attractive feature for independent firms, in part because it is a hook to keep advisors from leaving.  It allows firms to promise they will give you all the data they can, then once you are leaving point out that their tools have no export options or export to an essentially unusable format. 
 
This is so common it might as well be considered a standard.  You probably won’t firm a firm that stores your data in a portable format and, if you do, you can’t trust them to keep doing it.  Even if they offer a legally binding contract stating that you own the data, it’s worth thinking about all the fact that regulators are going to back pretty much any claim that the firm needs to change its policies or retain data to protect client privacy.  Advisors don’t have a strong position when it comes to pressuring independent firms on the issue.
 
The Solution
It’s fairly simple, actually.  You just have to create your own copy of the client information in a secure application.  Pretty much every clearing firm or institutional custodian offers data feeds either for free or at a nominal price.  These firms tend to have full account, holdings, and transaction information- including TD Ameritrade, Schwab, Pershing, National Financial Services, etc.  The consolidation and reporting technology provided by independent firms, tools like Albridge Wealth Reporting, can also provide information, though it tends to cover registration, account and holding data only.  Adding this information to the client relationship information you’d store in a CRM, can create practical, portable data store that moves with your business.
 
Advisors Assistant offers a great way to do this.  It features comprehensive CRM at its core and robust add-on modules for both Investment and Insurance product data, many options for collecting data from investment firms and aggregation systems, and multiple hosting options to meet your information security policies.  Advisors Assistant empowers your firm to actually use your data to do everyday business while still saving it for a rainy day.