Follow the data
You don't have to be a mathematician or some other geek to have a healthy respect for data - although, no doubt, it helps.
We live in an information-rich universe. Indeed, it is becoming evident over time that specified (ie. meaningful) information is as fundamental to life, as matter and energy. In recent years, molecular biologists have hypothesised that, eventually, we'll end up storing data in DNA, rather than on silicon chips, because of its immensely improved capacity for storage. They ain't seen nothing yet - apparently the carbohydrate strands that exist on the surface of cell membranes would render DNA obsolete for that purpose, if only we could synthesise them with any degree of reliability. Right now, we can't, so silicon is our best option.
Independent Financial Advisers (IFAs) inhabit a professional world where 'the data' is not merely a kind of incidental fact of life, or one of those things we have to make some kind of practical allowance for. In ye olde days, the grudging response to the existence of client data might have been to heave a doleful sigh and order a new filing cabinet. In fact, as we have discovered in recent years, there's no filing cabinet big enough to cope with the volume of information that we receive passively and proactively, but also generate, as the direct product of our advisory function. Data is too precious to leave lying around in largely unstructured paper files, left carelessly in tottering piles, and interleaved with crisp packets, even if the ICO had not popped into existence and started making all kinds of unreasonable demands. Data in that kind of format is of little practical use to anyone, due to its inherent inflexibility and lack of fungibility, not to mention its worrying tendency to be incomplete or to compost whilst you are looking the other way.
At ValidPath, we've been on a journey in respect of data for many years - in fact, you might call it more of a pilgrimage, because it has always been underpinned by certain beliefs about the nature of the journey, and it has a particular kind of focus. Given the kinds of objectives we've had, and our own high standards for the recording, use and interpretation of client data, it's not as if we're ever going to get complacent about this subject. In fact, the very nature of information itself, and the sheer range of permutations available to the thoughtful IFA, tends to lead us ever-onwards when it comes to systems-development.
Hence, ValidPath's (relatively) new practice-administration system, introduced in December 2019. It's much more complex than what preceded it, but that's because it is much more powerful in terms of what it's capable of delivering, and (as we are now discovering) it gives rise to so many more possibilities when it comes to the effective re-use of client data. This benefits the client, in terms of outcomes - and it benefits the practitioner, when it comes to delivery. It has represented a steep learning curve for everyone involved, but we've been doing our best to help, by arranging training, and publishing guidance. There's a huge amount of incremental improvements in the pipeline, and you should be aware that ValidPath's compliance and management teams are working continually, proactively, on these matters, together with our software providers.
In the meantime, may I encourage you: follow the data. Don't just record it. Use the two-way interaction between XPlan and CashCalc to perform essential financial modelling on your client data. Use the DeFaqto risk-profiling functionality to help you frame the 'best fit' in terms of asset-allocation model - documenting every step in the process, as you go, all the way through to product-selection. These information-led systems are designed to help IFAs demonstrate the suitability of their advice at pretty much any step in the process. Through our consistent emphasis over many years, we do now have systems in place to give our Advisers the full confidence that they have satisfied the FCA's suitability standards.