Did anyone ask the clients?

By Geoff Rogers, Iress

Are onerous compliance requirements getting in the way of delivering the experience your clients actually want from your business? Better data practices could be the solution you’re looking for.

What do clients want?

Despite being such a simple and essential consideration for any business operating in the stockbroking and investment advice space, the needs of the client have – it’s often been argued – taken a backseat to other priorities in the regulatory agenda of the past few years.

While the average Australian consumer has become accustomed to accessibility, spontaneity and frictionless engagement with other products and services in their lives, wealth management remains one area where paperwork, back-and-forth and information overload are both frequent and inevitable.

Disparate reporting obligations, onerous disclosure requirements and annual fee consent arrangements have led to circumstances where retail clients can find themselves, say, signing multiple forms each year for a service they already agreed to – and recent calls to upgrade the wholesale investor test threshold could see many more investors suddenly in the same situation.

Aside from the obvious compliance costs involved, businesses risk client attrition due to an imbalance between disclosure and meaningful client engagement, exhaustion with the onerous advice process and the increasing consumer appeal of self-directed investment tools which allow users to sign up and start investing in minutes.

All of this is doubly relevant to prospective clients – especially those of younger generations. The past 10 years have seen a massive increase in the availability of micro-investing platforms, online broking and investment “advice” in the unregulated social media influencer space. Even the enthusiasm for cryptocurrency investing, while dampened significantly in the wake of the recent market crash, points towards the pervasive appetite for wealth management and investment advice – if only they didn’t have to jump through so many hoops to get the real deal.

Taking back control

So, how can businesses operating in the stockbroking and investment advice space address these issues and ensure clients’ needs are prioritised?

While the inefficiencies brought about by the prevailing regulatory and industry environment are largely out of your control, there are things you can do to improve the experience of current and prospective clients – and it all comes down to how you use data.

Using a structured approach to client data, you can develop sophisticated approaches to segmentation and tailor your communications (and the channels you use) based on what works best. Obviously, this isn’t something that can be achieved overnight. And for many businesses, a full end-to-end, tailored digital experience – and the depth of data analysis and technology expertise required to achieve it – may seem desperately out of reach. Which is why finding the right technology partner to help you develop your digital client experience is so important.

Cleaning out my closet

Foremost, you need to consider the client data you already have – where it is, how it’s stored and how it’s structured. Ideally, your technology partner will help you manage this data from a single source so that it’s consistent, accessible and usable across multiple applications.

It’s likely you’ve accrued a lot of data from different sources over time – these sources may include the CRM you use, practice management software, spreadsheets and even documents in filing cabinets. If you (and your team) have employed different record-keeping systems over the years, this data might technically be available but difficult to parse and organise.

For this reason, it’s important to review what you have, clean it up and consolidate it. Depending on how long you’ve been collecting client information, this could be a big job; errors and inaccuracies might have crept in over time, data could be stored in wildly different formats and there might even be gaps in the information.

The way forward 

Once you’ve consolidated everything – and determined what’s important and what can be deleted or disposed of – it’s time to implement a new system for data collection. Crucially, everyone on your team needs to understand the new process and stick with it from now on.

Ideally, your system should represent a single source of truth for all client data. It should be easily accessible, scalable (in the sense that you won’t run into storage issues with new clients) and secured via redundancies like regular backups on the cloud. This may require some training and guidance across the business to ensure everyone understands how to store data on the system and retrieve it as necessary.

Reaping the rewards 

With the hard work done, you’re now in a much better position to work with your technology partner to make use of that clean and organised data. You can use it to analyse the behaviours and preferences of specific clients (or client segments) and tailor their advice experience accordingly.

Of course, the client experience isn’t just what the client sees – it’s also defined by the efficiencies in the background driven by a robust technology approach.

The right technology partner should be able to offer a future-proof foundation for ongoing management of data pertaining to client fee consent, transactions and target market determinations using solutions like the blockchain – thereby reducing the burden imposed by some of the regulatory challenges mentioned above and freeing up more time for customer-facing activities.

That’s the ultimate benefit of using data as the foundation of your client experience: it gives you more time to focus on what your clients want and what you do best.

This article is information only.