Data is the new oil and has the potential to revolutionise the financial advice profession. It’s true value, however, can only be extracted by expert data management and a full understanding of its potential, according to Padua Solutions co-founder and co-CEO Matthew Esler.

Mr Esler says financial advisers can maximise value creation for their clients by boosting the use of data to achieve superior investment management decision-making and greater efficiencies.

“Data-driven decision-making is transforming investment strategies and platform choices in financial advice firms. By identifying and bridging data gaps and leveraging data insights, advisers can make more informed and effective decisions, maximising value for their clients.

“Advisers can harness the power of data to transform their advice firms and licensees to deliver superior outcomes,” Mr Esler said.

However, advice firms need to invest more in better data management of their existing customer relationship management (CRM) system.

Mr Esler says many advice firm CRMs, when doing a CRM Xray, look like Swiss cheese, filled with holes and operating inefficiently. This is one area where significant improvements can be made.

“Advisers often encounter incomplete information where critical details are missing. To bridge these gaps, firms need to prioritise comprehensive data collection and regular updates through reviews. Integrating the CRM with data validation sources can also help create a holistic view of the client's financial situation,” Mr Esler said.

“By conducting a CRM diagnostic, for example, firms can identify and manage data gaps across their client base. A comprehensive understanding of the client's existing position is essential for providing quality advice.”

Another important use of data is to provide more personalised advice, he said.

“Personalisation involves tailoring recommendations based on the client's circumstances and preferences. This can be achieved by using data analytics to identify client-specific needs, goals, and risk tolerance. Personalised advice not only improves the relevance of the recommendations but also strengthens client relationships and trust,” Mr Esler said.

Advisers can also leverage data to enhance engagement with their clients. This can be done by providing clients with regular updates, insights, and reports based on their data.

“For instance, advisers can use data visualisation tools to present complex information in an easy-to-understand format, helping clients make informed decisions. Additionally, interactive tools and platforms that allow clients to explore their data and scenarios can increase their engagement and satisfaction,” Mr Esler says.

“Advisers should continuously educate themselves on the latest data trends, tools, and technologies. The field of data analytics is constantly evolving, and staying updated on the latest developments can help advisers leverage new opportunities and stay ahead of the competition.”

To help advice firms, Padua has developed the ‘Research Manager’ tool, a comprehensive database of over 900 platforms and 25,000 investments. “We use data validation and verification processes to ensure the accuracy and relevance of this research for our adviser network. This enables advisers to evaluate and recommend platforms and investment strategies based on a wide range of features and benefits tailored to their clients' needs,” Me Esler said.

“We aggregate investment data too, on over 25,000 investments, from several different sources. The breadth and depth of this platform and investment data ensures that our client advice firms can evaluate and recommend platforms and investment strategies based on a wide range of features and benefits specific to the needs of their clients.”

Mr Esler noted that providing advisers with technical support has never been more important. To fill the void left by the exodus of technical services teams, Padua, under the direction of Rudy Haddad, recently released over 880 unique technical strategies and almost 2,000 variations into its Recommend software.

“We also offer unlimited access to all our software – Home, Discover, Compare, and Recommend – for any financial advisory firm using Padua’s advice generation services.  Each month we’re capturing data on what strategies advisers are recommending. We are also benchmarking this data at the adviser, firm and licensee levels. This data is also being used to determine the most popular recommendations, as well as understanding the strategies that aren’t being recommended and trying to work out why,” Mr Esler said.

“Continuous education on the latest data trends, tools, and technologies is crucial for staying ahead,” he concluded.