Fintech Corner: Why Data-Centric Technology is Client-Centric Technology


What was once considered a good wealth management technology stack was entirely purpose-driven—as long as the software and equipment did their work reasonably well for the practice, advisory firms could feel like they were in good hands.

But today, a good technology stack has to focus on users and pivot on data, said Adrian Johnstone, co-founder and president of Practifi, a business management platform for the wealth management industry.

“A lot of this is about integration and trying to help people understand that having lots of different tools that are not linked together and a lot of data stuck in different silos can be damaging to your business,” said Johnstone. Not only is it hard for business leaders to get a comprehensive, birds-eye view of what their company is actually doing, but “you end up with little pockets of data locked away that don’t interrelate, so you also have little pieces of your clients locked up in different places.”

A Role-Based Solution

Johnstone and Practifi are fresh off of their Wealth Management Wealthies award win in the CRM technology category, a recognition explicitly connected to the platform’s role-based applications and their potential to improve the client experience.

Role-based apps allow users in every role within a firm to enter and interact with data in the system in a way that is specific to their function—so an advisor or client relationship staff member would have a distinctly client-centric view, while a marketer would access the same centralized pool of data with a campaign-oriented view.

“It’s about getting the right data to the right people in their right role,” said Johnstone. “It’s not only about improving the client experience, but also the team experience—giving people what they need, in the form that they need it, and before they even have to ask for it.”

From Personalized To Hyper-Personalized

Hyper personalization is one of the biggest trends intersecting finance and technology today, said Johnstone. Personalization is a passé trend—it is no longer sufficient to put someone’s name in a letter or message asking them what they want to invest in or tracking an ESG preference.

A hyper-personalized experience has already come to dominate online retail and content streaming services. Televisions will recommend what people want to watch, websites will recommend what they think people will want to buy, and web browsers can recommend to users pages to read. Refrigerators can even tell consumers what they need to include in their next grocery order.

“Hyper personalization takes information to the next level,” Johnstone said. “It looks at all of the data points you know about for a client holistically. So instead of just knowing that a client is somewhere on a risk profile, we want to understand in great depth what drives them to be risk-takers or to be risk-averse.”

Hyper personalization has to include a different set of inputs, like ‘social listening,’ tracking a client’s social media behavior to understand their interests and beliefs. This can allow companies to be proactive, gearing their experience with the firm based on information that the client hasn’t told the firm directly, but the firm has learned about the client over time.

Creating and mastering a hyper-personalized experience will be instrumental in capturing the ongoing intergenerational wealth transfer, where somewhere between $30 trillion and $70 trillion will pass to Millennials and Generation Z over the next three decades. These generations are already accustomed to a data-driven client experience.

“People don’t want a cookie-cutter experience, it has to be based around the individual and as a result, you have to know people intimately,” said Johnstone. “The only way to do that is to pull all the data into one picture. A data-driven technology stack is about looking at data at the front end where you capture information from the client all the way through what you do with that information.”

That may require advisors to change the way they think about technology.

New Way Of Thinking

The tech stack has traditionally hinged around an asset or investment, said Johnstone, with a portfolio management system at the center of everything—making the most important information where the client was invested and what could be done with it.

“Historically we put money in the middle of the technology stack because our value proposition was that we would increase your return on investment,” he said. “That proposition has evolved and continues to evolve to become much more comprehensive, and now it’s the client record that needs to be at the center of the technology stack, the CRM. Additionally, it’s the instant portability of data between systems that drives the power of an advisor’s technology stack—a CRM that merely captures basic information in a world of data-driven relationships and client experiences is totally redundant.”

Make Sure Your Tech Connects

Information has to flow bi-directionally—to and fro—between all of the different pieces of software that a business is using, with a CRM or business management platform collecting all of the client information in one central place.

A good data-driven technology stack should include a CRM, risk-profiling and financial planning tools, client-facing portals, email and calendar tools, portfolio management tools and communications tools that are all interconnected, but not necessarily as part of an all-in-one platform, said Johnstone.

“The danger of an all-in-one system is the assumption that if you’re using technology all from one provider, it will theoretically be best for you and work the best together,” said Johnstone. “That’s rarely the case.”

With interconnected tools, firms can use that rich data to segment clients and build out more specific servicing models, allowing them to deliver a more seamless experience. Thus, advisors should consider a technology vendor’s approach to integrations before deciding to work with them.

“If you’re using a platform that is very open, like Practifi, with a portfolio tool that is a walled garden, you’ll have a sub-optimal experience with less data richness than if you selected a portfolio tool that is open from an integration perspective,” said Johnstone. “People need to change their perspective on technology providers and think of them as partners, not vendors, and make sure there’s a common understanding of the importance of interconnectivity among those partners.”