Data is the name of the game when it comes to successfully managing wealth. Data, and by extension, data analytics, can help wealth managers understand trends, make informed financial decisions, and help forecast growth: all tasks that build stronger manager-client relationships.

But because data is messy–and by messy, we mean constantly growing in all directions (and in doing so creating gaps in accuracy, consistency, and connectivity)–many wealth managers struggle to make sense of it. To begin with, just obtaining data is a considerable challenge. But even enterprises that have data are hard put to get meaningful insights from it.

Gathering, analyzing, and extracting insights from data has the potential to transform wealth management strategy and drive incredible impact, particularly when it comes to helping investors live an Intelligent Financial Life™. But in order to launch this transformation, enterprises must first understand what’s at stake–and where they stand with their own data.

Data challenges in wealth management

In astrophysics, Hubble’s Law observes that space-time–that is, the volume of the observable universe–is constantly expanding. The same is true of data; the scale is enormous. Each day, terabytes upon terabytes of data are born, observed, gathered, and analyzed by systems around the world. McKinsey found that global data volume increased from 2 zettabytes in 2010 to 41 zettabytes in 2019. (A zettabyte is approximately equal to a thousand exabytes, a billion terabytes, or a trillion gigabytes, according to Cisco).

In wealth management, leveraging this data comes with an ever-changing set of challenges–many of them difficult for managers or their enterprises to navigate independently as a consequence of the sheer scale and complexity. However, both business intelligence and technology challenges tend to suffer from one common flaw: an inability to connect, both with each other and with other applications. And the more connections go missed, the more insights go undiscovered–insights that could help drive value for both wealth firms and their investors.

Business challenges

“Water, water, everywhere / Nor any drop to drink.” Coleridge’s famous poem describes the modern state of data with regards to analysis for many wealth management firms: a surfeit of information, without any means to understand it. In fact, Gartner discovered that only 14% of organizations have achieved a 360-degree view of the customer despite data access.

Even if an organization has a business intelligence strategy, such applications are usually neither actionable nor impactful. Frequently, the responsibility of processing this information falls on data practitioners working with limited resources. Consequently, intelligence may be delivered in silos, and without taking the organization as a whole into account, offering extremely limited perspectives.

Technical challenges

Lack of adequate, connected technology is often responsible for growing pains among wealth management enterprises. Scalability is more challenging when data is disconnected; informational gaps, inaccuracies, and inconsistencies are just a few of the symptoms. Historical lineage tracking may also be difficult (or absent altogether).

Such technical challenges can be expensive for enterprises in many senses of the word. Total ownership costs are generally pricey, and outdated infrastructure–a common occurrence in the ever-changing world of data and data analytics–can cost enterprises, firms, and ultimately wealth managers their proficiency and reputations.

Evaluating data solutions

If disjointedness, inconsistency, and fragmentation are main offenders in wealth data management, then enterprises should seek solutions that emphasize connectivity, consistency, and unity. Envestnet’s Wealth Data Platform offers wealth managers a streamlined tool for enhancing their clients’ financial lives and promoting holistic financial wellness.

  • Get insights. Simplify your approach to management with analytic intelligence from previously disconnected/fragmented data sets including KPIs, propensity scores, new opportunities, and wealth data across portfolios.
  • Get connected. Data talks to each other–let the conversation flow by connecting, normalizing, and consolidating information from many sources: custodial brokerages, non-managed accounts, insurance, planning, bank and credit data, benchmarking, performance, crypto, aggregated, and more.
  • Get data. Envestnet datasets are as broad as they are deep: 17 thousand sources (and growing), more than 422 million linked consumer accounts, and over 14 million investor accounts. Leverage domain knowledge via our relationships with 16 of the 20 largest banks, over 700 fintech companies, over 500 of the largest registered investment advisors, and 47 of the 50 largest wealth management brokerage firms.
Are you getting useful insights from your existing tools (like Truelytics and Insight Engine)? Contact your Envestnet partner to learn how you can stay on the cutting edge of wealth management with the Wealth Data Platform.
Activate your data today

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