Published on

20 Feb 2026

Why is client data ownership critical to financial advice firms?

The hidden cost of fragmented information

Have you ever tried to move clients to a new platform and lost all the historic data you used to have access to? It’s even worse if you try to move CRMs. Until you’ve been through this process yourself, you might not realise the extent to which the CRM or the platform owns your clients’ data and not you.

This can give you a serious headache and even a huge gap in reporting their financial history. It might even leave you feeling handcuffed to a particular product and not able to pursue the best option for your clients.

But not having control of your client and practice data can have a host of other, less obvious issues for your advice practice.

The management information (MI) gap

Practice leaders cannot make confident strategic decisions without clear visibility of business performance. Which advisers drive the most value? Where do client retention risks exist? What's the actual net asset flow across all platforms after accounting for market movement? Am I getting my charging structure right?

Answering these questions from fragmented data sources requires a lot of manual effort. Extract reports from Platform A, download data from Platform B, pull CRM records then reconcile discrepancies in a spreadsheet. It might take hours, so much so that a lot of firms don’t even bother.

The reconciliation burden

Imagine this simple scenario:

Platform A reports a £5,000 contribution dated 15 March, but your CRM has it logged as 14 March with a £5,100 contribution. Which is correct? Without reconciliation, you might spend hours trying to get to the bottom of it. Some advisers might even simply guess.

When reconciliation lapses, data integrity degrades. If your CRM and platforms are consistently reporting different numbers, your advisers are unsure. If clients notice this lack of clarity, trust can erode. The foundation for demonstrating transparency and good client outcomes crumbles.

The Point of Advice problem

An adviser sits down with a client for their annual review, having prepared the previous day using platform data that was correct at the time. Overnight, if a significant transaction processed, the adviser doesn't know this and, during the review, recommendations rest on incorrect assumptions. This is an extreme example, but it illustrates a problem with fragmented data: you might be advising based on yesterday’s situation, not today’s.

This can undermine advice quality. Consumer Duty requires advice to be suitable, considering clients' current circumstances. ‘Current’ means genuinely current, not yesterday's position. Without real-time access to accurate portfolio data, advisers cannot confidently deliver advice that meets this standard.

The compliance and governance challenge

Compliance officers need oversight of adviser activities at scale. Giving compliance officers access to up- to-date, clear data in easy- to- action dashboards means they can do their job quickly and accurately, with minimal disruption to your advice practice’s day-to-day.

Fragmented client data also constrains proactive compliance management. Rather than identifying emerging risks before they crystallise, compliance officers respond reactively to complaints. The difference between proactive and reactive compliance significantly affects both client outcomes and regulatory relationships.

The strategic decision constraint

What type of clients are the most profitable? Am I charging clients the right amount for my business? Where should I direct my marketing efforts? Which clients are at risk of leaving?

These decisions require understanding your clients’ data as well as your own business capacity and performance clearly. Without clean data, this assessment becomes guesswork. And, if this is something you’re considering, the precision required for confident M&A decisions such as client retention rates, organic growth and adviser productivity remains elusive.

The valuation impact

Practice valuations ultimately rest on sustainable, verifiable cash flows from a stable client base. Fragmented data undermines all three elements. Sustainability appears questionable when practices operate at capacity ceilings. Verifiability suffers when data requires manual reconciliation. Client base stability becomes unclear when retention metrics derive from incomplete information.

Having your data house in order gives a buyer confidence and allows you to get the best possible price for your practice. It’s something acquirers actively seek out as it allows them to come in smoothly, reducing disruption to your clients.

Command Deck's pre- and post-due diligence dashboards specifically address this challenge. Clean, verified data, presented through standardised reports, accelerates buyer confidence and supports premium valuations.

The technology adoption barrier

Of course, we’re obliged to include some mention of AI in every article, but it is a real factor here. If you’re looking to adopt AI, how do you know where best to implement it? Most importantly, what is the quality of the data it’s going to access?

With such a pace of progress, you could be thinking about automated compliance checking, predictive client behaviour analysis or intelligent portfolio recommendations. These all share one requirement: clean, structured data.

Practices still wrestling with basic reconciliation cannot harness AI effectively. You’ve first got to solve the data fragmentation problem. If you can’t, you might get left behind by practices that have established clean data foundations and find it increasingly difficult to make the jump.

What’s more, if you don’t even own your client data, it might be impossible to allow your AI agent to get the access it needs.

The capacity ceiling

Perhaps the most undermining impact of fragmented data is the ceiling it creates on practice capacity. Every hour spent reconciling data represents capacity that could serve clients, enhancing your level of service or being able to work strategically. Fragmented data may constrain your practice by 15-20% of its capacity.

Making data a strategic asset

Having all your client and practice data in one place, under your control, gives you the flexibility to pursue your clients’ best interest. After all, as their chosen adviser, you’re the one they want handling this on their behalf.

Practices that recognise this opportunity are investing in unified practice management solutions that eliminate fragmentation. They're achieving operational efficiencies that translate to bottom-line savings and profits. They’re able to deliver client experiences that strengthen loyalty and build businesses positioned for sustainable growth and premium valuations.

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FAQs

Frequently asked questions

How much time do practices typically waste on data reconciliation?

Most practices spend three to five hours weekly on manual reconciliation; this translates to 150-250 hours annually. Larger firms with multiple advisers and four or more platforms may spend significantly more.

Can fragmented data create regulatory compliance risks?

Yes. Consumer Duty requires demonstrating good client outcomes based on actual data. When data quality is questionable, practices cannot confidently substantiate advice provided. Compliance officers struggle to maintain oversight when information fragments across systems.

How does data quality affect practice valuations during sale?

Buyers discount valuations when data quality appears poor. Practices demonstrating clean, verifiable data through dashboards and automated reporting command premium multiples, as buyers recognise stronger operational foundations and lower integration risks.

Does improving data quality actually impact practice profitability?

Unified data eliminates the MI (management information) visibility gap, reconciliation burden, compliance challenges, strategic decision constraints, technology adoption barriers and capacity ceiling. This enables financial advice firms to make confident decisions, deliver quality advice and achieve optimal valuations, ultimately contributing to improved margins.

How does fragmented data prevent AI adoption?

AI requires clean, structured, consistent data. Practices must establish clean data foundations before AI capabilities deliver value. This creates a widening gap between practices ready for AI and those still wrestling with basic reconciliation.