There are 2.5 quintillion bytes of data created every day[1] and ongoing growth is exponential. The availability of data on the internet only compounds the issue as old data lives forever and new data is added daily. At least we know the data on the internet is always accurate (haha).
So, what data should you use to benchmark your clients or manage your business? You must have a data source that is current, comprehensive and trustworthy to get the job done. Here is how Fiduciary Decisions gathers, processes and presents data “from the source” that will enable you to better retain clients and grow your practice.
The importance of clean data is driven by how people will use it. For Fiduciary Decisions, the data provides context for service providers and fiduciaries as they benchmark their retirement plans. Given that benchmarking is a fiduciary obligation, clean data is imperative.
The risks associated with using data that is old or inaccurate are significant. A fiduciary could arrive at conclusions that are invalid and potentially harmful to the plan and/or participants. Correcting this issue can be time consuming, costly and even litigious.
In a similar way, advisors and other service providers can use clean data to make better business decisions. For example, an advisor could ask themselves, “Is my pricing and service model correct? Are there things that I should be doing differently relative to my services, or my fees?” Clean data will allow them to evaluate and assess their situation and align with industry best practices. Whereas, if an advisor is using dirty data that guides their business decisions, it could be detrimental. Not only to client relationships, but potentially to their ability to grow and thrive within their practice.
And so, that is why, it is critical to only use clean data.
The Fiduciary Decisions’ data comes from three different sources.
The primary source is directly from recordkeeper data feeds. This data set comes from our direct recordkeeping client relationships. It arrives on a monthly or quarterly basis and is stored in a way that ensures that we understand the data, track it’s migration throughout our technology platform, and have stop gaps in place to consistently confirm that it is accurate and up-to-date.
The second source is from our direct users of the system that provide their data. An advisor will add their advisory fees and services into the system as part of our Business Management Dashboard. When they bring data into the system, they’re doing so to evaluate how their fees and services stack up. This is done for two purposes, one, to educate themselves thus improving their business model, and second, to ready themselves for benchmarking.
The third source is through our benchmarking efforts on behalf of a client. Essentially, if an advisor’s client needs data from a recordkeeper with whom we do not have a direct client relationship, Fiduciary Decisions will gather the information. That data then enters into our system and becomes part of our overall data set and ensures broad recordkeeper representation.
We collect our data in a manner that ensures comparability. We build a structure for each plan to review what you get for what you pay and there is a real rigor that occurs to make sure that all data points are compartmentalized correctly. Our structure also ensures that we avoid things like double counting.
When you think about sub-standard data, it could be old data that is no longer current. Because of this, the data is stored in a manner that enables us to look at data over time. If at any point in time that data becomes information that we no longer believe is reflective of what’s happening, we make sure that it departs from the dataset.
This process is something that is ongoing and recurring and it’s one that is supported by the fact that so much of our information is coming in on a very frequent basis.
We believe the primary differentiator of our data is it is “from the source” which means all data is obtained directly from the service provider receiving revenue and providing the services. This makes our data set broader and more accurate than your typical “fee-only” benchmarking firm. Our data goes beyond meaningless comparisons and gets to how quality, service value and extra credit can offset fees.
Whether you are a bundled or unbundled recordkeeper, a TPA, or an advisor, the data in our system enables you to explain to your clients and prospects why the value you are adding justifies the fees you are charging. This data can be used to satisfy a benchmarking requirement or improve the way your practice thinks about fees and services. The data has a wide range of applications and we’re proud that it helps our clients and their clients every day.
The Fiduciary Decisions’ Business Management Dashboard enhances our client’s practices in many ways. It can be used to protect current revenue, by helping you analyze your plans to see if you’re competitive. It can help the advisor make adjustments to be more competitive, whether it is a new business opportunity or an existing client. It supports our clients to benchmark themselves, and importantly, helps their clients meet their fiduciary obligation. Lastly, scaling and growing their business through benchmarking prospective plan sponsors.
When you have data that is accurate and complete, you are able to have informed and empowered discussions with clients and prospects that will drive actionable and meaningful changes to their plans.
[1] “How Much Data Do We Create Every Day? The Mind-Blowing Stats Everyone Should Read.” Forbes.