Making data the advice hero

A firm believer in the value of financial advice and a platform fanatic for the past 30 years, HUB24’s Director of Strategic Development Jason Entwistle has embarked on his next challenge.

His quest is to use data to understand the value of advice.

Speaking at a recent HUBconnect webinar titled ‘The future of technology and data in enabling advice’, Entwistle outlined how HUB24 believes it has a role to play in answering this question.

“If we can house data, can we use data to understand the value of advice? Its something as an industry we need to look at.”

Data and technology are at the core of HUB24’s business and help drive innovation and transformational change in the financial advice industry. Following the Royal Commission and its exploration of the value of strategic advice, Entwistle said he has embarked on a self-described ‘personal crusade’ to see how data and tools such as machine learning could assist in understanding the value of advice.

“By tilting HUB24’s role as a custodian of assets to be a custodian of data, we can build the infrastructure required at scale to help licensees and advisers meet their compliance obligations while materially lowering the cost of advice.”

Advice collectives highlight data challenge

The first step in this quest was to speak with advice collectives to understand their data challenges and how HUB24 could leverage its data and technology to help build the data infrastructure needed to make compliance a ticket to the game and to ultimately make advice more accessible and affordable.

Entwistle said a common theme emerged from these meetings – lack of access to quality data, which is an essential ingredient to digitise advice practices and to make a scalable solution.

“Technology has come leaps and bounds, but the industry over the past two decades has been dominated by institutions who licensed thousands of advisers each.”

Many of these practices had been part of the historical institutionally owned licensee model where data had been tied up in the product layer rather than the advice layer. This means that when these models disbanded, no centralised infrastructure was left behind for these practices to use.

“Where are the big data pools with automated compliance hanging over the top?” Entwistle asked.

Developing a data framework

An industry-wide compliance framework has never existed because compliance was regarded as a competitive advantage rather than a ticket to the game.

But a centralised and scalable data infrastructure needs to be built so advisers in all business models can access compliance solutions and so fintech’s and regtechs can build out solutions to existing challenges in advice.

“Advisers want flexibility and licensees need visibility when it comes to data but there was a lack of access to quality data,” explained Entwistle. “Also, a lot of the data sitting in advice practices is unstructured in emails and SOAs.”

Cleansing data to make it usable

To build a quality data set for advisers requires extracting data from multiple sources that sits unstructured in emails and SOAs, so advice practices can be digitised.

To address these challenges, HUBconnect has been working with advice collectives to identify their common data challenges and solution needs. HUBconnect is partnering with licensees and leveraging its technology and data to create a baseline data set which can be used to build industry-wide solutions and help make advice more accessible and cost effective.

To do this, HUBconnect is applying machine learning to structure unstructured data and create scalable industry solutions to enhance business efficiencies and create value.

HUBconnect provides seamless integration between platform and platform administration and reporting services to deliver greater choice and flexibility and provide a single view of wealth.

Road ahead

Entwistle is energised about the potential insights data will be able to offer on the value of advice.

Further, using a structured data set as its base, different machine learning applications can be used and data patterns deciphered to potentially unlock a new source of information on what clients value.

It is a capability that comes at a time when the demand for advice and the transformation of the industry are converging.

“As demand continues to grow for advice, we need to ensure as an industry we are working together to make financial advice more accessible and affordable,” said Entwistle. “Using data, we can make significant inroads into this challenge.”

• Watch ‘The future of technology and data in enabling advice’ webinar featuring Jason Entwistle.
• Check out our related research paper, “The future of technology and data in enabling advice.”