Data is a critical part of wealth management and investors are fully aware of this, but should they be more empowered to take control of their data?
Fredrik Davéus, CEO and co-founder of Kidbrooke, noted that data in itself is not that powerful, the real power comes from using it. He said, “If you ask any investor whether data is valuable, the answer will undoubtedly be yes. The real issue, however, is not understanding the value of data, but knowing how to use it.
“An investor either commits the resources necessary to leverage data effectively or does not. Therefore, the focus should shift from merely recognizing data’s value to understanding its practical application. Once an investor understands how to use their data, they inherently understand its value—and to use it effectively, they must own it.”
To encourage the adoption of data ownership, firms just need to understand the real importance of data quality to the investment decision. Davéus said, “The most effective way to ensure data ownership is to actively use the data. When data is central to an investment decision, ownership becomes essential—without it, data quality, completeness, and timeliness suffer. Therefore, the best technologies are those that enable secure and meaningful data usage. If data isn’t used, ownership becomes irrelevant.”
Through data ownership wealth managers can gain flexibility and control over their tools, ensuring they can improve their decision-making processes. Similarly, there is a case for investors to have greater data ownership, allowing them to easily share their data with firms, making it easier to switch providers.
Data ownership for wealth managers
Firms are implementing an array of technology to improve their operations, everything from CRM, reporting, portfolio building, onboarding and more, becoming more digitised. However, as many rely on various vendors to provide these services, it means their vendors data can be spread across various siloed ecosystem. This often results in data duplication and inconsistencies across tools and an environment where the firm has little control.
As a result of this, many wealth management firms are attempting to implement an overarching firm-owned data layer to power the entire technology stack, according to Katy Gibson, ByAllAccounts Managing Director, Morningstar Wealth.
Gibson pointed to several key reasons for this shift. One of these is portability, allowing data to move with the firm and not with the vendor. Another is flexibility to implement data across tools, as well as the speed to do it without needing support from vendors. Finally, data ownership gives the firm the ability to scale on their own terms.
There is no simple solution to data ownership and firms will have to find how to navigate their unique challenges. In a recent blog post, Gibson outlined how firms can adapt to data ownership. “The idea of fully owning a firm’s data can feel overwhelming. And that’s OK. This isn’t about ripping everything out and starting over. It’s about taking the first step.” This includes collating data into a data lake, shifting key data pipelines toward data ownership and gradually growing it from there.
Gibson added, “To own your data, you need to control the pipeline. That means collecting it first—directly from custodians or providers—and pushing it to the platforms you use. This isn’t about extracting data from systems after the fact. It’s about making those platforms—whether it’s portfolio reporting, a CRM, or financial planning—downstream consumers, not the source of truth.”
By owning the data and feeding it into the platforms a firm uses, they gain a range of new capabilities, Gibson noted. They gain visibility into each data point prior to it being transformed or filtered, they can ensure consistency across platforms, and they have the portability to move data if they stop using one tool and find a replacement. Finally, it gives them more control.
As to why data ownership matters for wealth firms, Gibson concluded, “When all your custodial and platform data lives in one place—structured, normalized, and owned by you—something powerful happens: You start to see things you couldn’t before: patterns across custodians, client behaviours across systems and risks and opportunities that were previously buried in silos. You’re not just building for flexibility; you’re building for increased insight. This isn’t just a technical pivot—it’s a strategic one.”
Data ownership for retail investors
Wealth managers are not the only ones that should care about the concept of data ownership. Investors should also be taking an interest in how they can own their data. Aside from being in control of the information that is being shared, one of the benefits that data ownership can provide investors is making it easier to share the data. Jurgen Vandenbroucke, managing director at everyoneINVESTED, believes that similar to an ID card, investors should have an investor profile ID card.
The reason for this comes from the inefficiencies firms face when building their suitability assessments. Investors are required to complete these to ensure investment or portfolio strategy recommendations are suitable for a client. However, financial institutions currently face many challenges when trying to complete these assessments, he explained. Traditional methods for completing these assessments are often manual, time-consuming, inconsistent, and often lack user engagement, resulting in high operational costs and low digital conversion rates. On top of this, investors will have to fill out similar questionnaires if they want to compare or switch provider, hindering empowerment and discouraging investing, he said.
However, one way to change this is through data ownership. Vandenbroucke said, “Back in 2019, as part of a research program at EDHEC, I wrote a blog on how to address this situation, see: Improve digital MiFID profiling using behavioural smarts | EDHEC Risk Climate Impact Institute. The blog concluded with a vision that has only become more relevant:
“In the future, ideally, the investor profile effectively belongs to the investor. Citizens carry their ID to identify themselves as a person. Investors should similarly carry their investor profile to inform on their investor preferences. The investor profile should therefore be generic and interpretable by “all” financial institutions. Financial institutions may differ on the solution or advice they link to particular investor preferences, but the investor profile as such ideally belongs to the investor and is hence transferrable. Investors should not have as many profiles as there are financial institutions.”
Vandenbroucke believes that improving the data quality, collection process and ownership can provide significant benefits to both sides of the party. For instance, by transforming data collection processes into engaging screen-flow processes that are self-service, a firm can generate more data, and by leveraging a quantitative approach they can improve the quality. This then provides the firm with better data that can make the investment experience better suited for the client.
Kidbrooke’s Davéus also noted the benefits of data ownerships for investors, encouraging more empowerment. He said, “Data ownership shifts the dynamic by requiring investors to take control of their data. This drives the need for new technical solutions to ensure high data quality and accessibility, leading to a more empowered and self-reliant investor base.”
Now is the perfect time for a push towards data ownership, Vandenbroucke explained. “For one, the general public’s awareness of data has increased. People now often assume data ownership, take data security for granted, and rely on the most stringent data protection – and rightly so. Regulatory initiatives at national and supranational level aim to create a framework that supports this, think GDPR, and technology is seeking standards to gain efficiency, think the EiDAS2-based architecture of the EU Digital Identity including verifiable credentials and digital wallets.”
Sharable data has gradually become more common across the financial landscape over the past decade. The biggest evidence of this mindset shift is the increasing global popularity of open banking. This is a concept that initially started in the European Union with the aim of harmonising payment capabilities and protections across borders. As part of this effort, customers were empowered to share their banking data with third-party providers (TTPs). Similar regulations have been adopted by various countries across the world, with the US and Canada among the most recent to draft similar types of regulations.
However, as we move to a world where customers have more control over their data, there are likely to be fears financial institutions might have around the prospect of giving data ownership to their customers. Chiefly, the ability of customers to share their suitability data with competitors, which could lead to comparisons and a loss of clients. However, this could be a risk worth taking. Vandenbroucke said, “In our view, there is much more to be gained by getting everyone invested! Moreover, the broader industry trend is towards greater transparency, data sharing and investor protection. In fact, let’s focus on the scalability of investment and advisory services to make sure we can serve everyone. At everyoneINVESTED we are confident that the ownership and portability of suitability data will prove to be a strength and an opportunity, rather than a weakness or a threat.”
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