Almost nine in 10 (88%) financial advisers say data provision influences their decision to work with a provider, says NextWealth.
NextWealth’s report found 70% of advice firms also view data as a strategic asset.
NextWealth said the findings, part of its Adviser Technology Series, Data Openness: Examining the Data Pipeline, highlighted significant concerns among advisers around data quality, availability and integration.
The report assesses current practices, perceptions and challenges, focussing on larger firms where issues are more acute.
It suggests that while the back office should be a single source of truth, for most firms its data is often inconsistent, incomplete and delivered in hard to integrate formats.
Two fifths (40%) of respondents at firms with more than 10 advisers said they did not receive all the data they require from providers.
Heather Hopkins, managing director of NextWealth, said: “Financial advice firms need good data for regulatory compliance, to reduce risk and critically, to deliver better outcomes for clients. Advisers told us that good data and data processes influence provider selection so this presents a golden opportunity for platforms and providers to wake up and respond to this growing need.
“The importance of data was even greater at the largest advice firms. Platforms and providers that respond stand to gain an outsized share of assets.”
The research also found that while providers give access to valuation data, major gaps exist in the provision of transaction level data and cost and charges data.
Hopkins added: “To deliver a true on-going service to clients, advisers need better data and platforms and providers are part of the solution. Platforms and providers have an opportunity to thrive amid the current disruption by responding to the changing needs of advice firms. Equally, some platforms and providers may risk becoming obsolete if they don’t wake up to the growing need for data openness.”
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