We live in a big data world. Advancements in ana- lytics help advisory firmleaders make faster, more informed decisions about what to prioritize and whereto focus. The introduction of “businessintelligence” has made it easy to spotpatterns, trends and client behaviors. Itgives advisors a snapshot of what theirclients are and aren’t doing.
Big data is good — except when it isn’t.
With so much data at our fingertips, advisory firm leaders can becomedependent on it. For all the good it cando to show an advisor what has happened or is happening in their business,it cannot by itself create true innovation.
If you understand the limitations ofdata, you can use it to your benefit. Here,we’ll look at the pros and cons of being adata-driven advisory firm owner.
PROS OF DATA-DRIVEN
When a firm has good data, it can findeasier ways to improve both its clientand advisor experience. That is, you canimprove how you serve clients and indoing so improve how an advisor feelsserving a client. It will measure clientsatisfaction and employee satisfaction.
On the client side, capturing data onhow they interact with their advisor oradvisor-provided technology solutionscan show what clients really want, whatthey’re not getting and what problemsthey’re having that you need to solve.
For employees, data can help increase
productivity. When processes are being
tracked, a leader can more readily spot
issues in systems and processes that
break down. If those processes are cor-
rected, a firm can quickly expand capac-
ity as it gets everyone following the same
workflows and taking consistent actions.
As employee productivity increases and the client experience becomessmoother, increased revenue anddecreased expenses are ultimately theresult. As your firm enters this newphase of growth, it can achieve a competitive advantage over other firmsstruggling to spot their weak areas. Inaddition, your firm can onboard clientsfaster, serve them better and keep themhappier over the long term.
The results are simply good businessoutcomes. Employees enjoy their job, soturnover is low; and clients enjoy theirservice, so retention is high.
With potential results like that, wherecould data possibly steer you wrong? It’snot so hard to see when you know whereto look.
CONS OF DATA-DRIVEN
Data tells us only about the past or thecurrent moment. On its own, it cannotinnovate or create change in an advisory firm. It can fix only what is wrongin the moment.
This repetitive cycle — looking at thedata, fixing what’s wrong, looking at thedata, fixing what’s wrong — doesn’t tellus where the industry might be changing or where a firm may need a deeperstrategy to enhance growth in the future.
In other words, data is data. Thecreativity found in being blissfully ignorant of data often fuels some of the mostinnovative (and perhaps disruptive)advances in industries. It also allowsus to think outside what is happeningtoday and find new ways to evolve asa firm.
The Pros and Cons of Being a Data-Driven Advisor
Relying too much on data can make you miss what is really relevant inyour business.
For all the good thatdata can do to showan advisor whathas happened or ishappening in theirbusiness, it cannotby itself create trueinnovation.
THE FAST TRACK
By Angie Herbers