Investment advisors and portfolio managers are always in search of actionable information, and insight gained from data can give the astute professional an edge over the competition. However, in an age driven by digital advice and impersonal learning, investment professionals face a surprising challenge: Those who thrive on data are often overwhelmed by the unprecedented flow of facts and statistics.
The advent of mobile apps and dashboard interfaces, paired with the proliferation of potentially credible sources, has neither simplified the lives of investment professionals nor helped them distinguish news from noise. Many investment advisors remember when all the critical information needed arrived every morning on their doorsteps. This magical invention – the newspaper – included all the financial news any respected professional could reasonably be expected to know. Newspapers provided a common frame of reference for the financial world, which, for many, encompassed just the continental U.S. Information was actionable and credible. The ability to correctly interpret information within its pages separated the winners – successful investment professionals – from the also-rans.
The most successful advisors will be able to tap into the power of a unified wealth platform to deliver expertise for their clients – and help separate actionable insight from noise.
Fast forward to a world that has dramatically changed for advisors. Reading the newspaper is necessary, but not sufficient. Instead, today's single source of information is the Internet and the economy is truly global.
Just as news outlets have 24/7 cycles to fill, the flow of data to wealth and investment services professionals is endless and ever expanding. The clicks-for-cash mentality has seeped into the financial services technology sector as well. Oftentimes, essentially useless data streams may be sold as essential or marketed as critical.
Not everyone today has the luxury of leisurely consuming irrelevant content. Serious investment professionals understand the quality of information is vital – not just the quantity. Dramatically increased fiduciary duties also require firms to keep pace with a growing number of regulatory and compliance-related developments. It's no wonder too much information – without the proper context and understanding of how to interpret it – can lead to data paralysis.
Past failures to monetize big data have not diminished its promise in the minds of many managers and technology providers. Indeed, one major shortcoming will most certainly be addressed by the next wave of unified wealth models: the access issue. This refers to the ability to deliver information to advisors in a preferred and customized way to help them meet investor demand. If managers and advisors become distracted by unfiltered noise, clients ultimately suffer the consequences.
News is information backed by knowledge; noise is data without context. At the end of the day, information alone is never actionable. Knowledge is the missing ingredient that allows investment professionals to add value and build brand loyalty. The most successful advisors will be able to tap into the power of a unified wealth platform to deliver expertise for their clients – and help separate actionable insight from noise.