Advisors have a wealth of information at their fingertips. A simple dashboard is key to harnessing all that data to make it work for them
For financial advisory firms, the bottom line may be dollars and cents, but experienced industry professionals understand that the most valuable currency of all is information: the information they rely on to make strategic investment and money management decisions, and the information they convey to their clients about the results of those decisions.
It is no surprise that many financial firms rely on electronic dashboards to help process that information for better decision-making capabilities. Data management dashboards are powerful tools designed to consolidate, coordinate and convey large amounts of data in a clear and concise way. However, not all dashboards are created equal. Understanding the differences between various types of dashboards is critical, especially for firms looking to adopt a new data management dashboard solution or expand their existing dashboard capabilities. Financial advisory decision makers should understand the basics about how to efficiently integrate multiple dashboards into their firm’s workflow — and appreciate how dashboards and the data they display can be leveraged effectively.
Financial professionals who take the time to educate themselves about these issues will be better prepared for the sometimes unforeseen challenges that arise when advisors add a new dashboard or change their existing platform. They will also have a more sophisticated understanding of what they need to do to prepare for and overcome those challenges.
While many financial advisory firms utilize some version of dashboard technology, the speed at which these tools evolve has increased. The diverse spectrum of capabilities that only the best solutions can provide makes a review of their design priorities and technical functionality an important prerequisite to a more advanced discussion.
The best data management dashboards are technically complex but extremely easy to use. They are designed to integrate large amounts of data (frequently pulled from disparate systems and sources) into a straightforward single-screen visual interface. Effective dashboards are unique in their ability to coordinate and display big data, presenting a real-time view of selected metrics that is not just accessible and informative, but also visually engaging.
The intuitive and user-friendly nature of a well-designed dashboard allows users to acquire a deeper, more detailed understanding of their business in a single glance. By boiling down a wide range of variables into a streamlined presentation, the best dashboard solutions provide meaningful insights into the most complex operations. And because dashboards integrate information from multiple sources, and connect that information to key metrics, they can reveal important trends and relationships that may not have been otherwise apparent.
The best solutions are highly customizable, both in terms of design and usability. Dashboards make it possible to easily track progress toward milestones or clearly delineated goals and objectives. The result is an unprecedented level of accessibility and transparency, with greater efficiency, additional clarity and the ability to focus on specific data sets to gain additional insight and perspective regarding key performance indicators.
Fundamentally, dashboards are a solution to the market’s demand to calculate, track and deliver critical metrics in a better way. The problem is that while many see and appreciate the power of a well-designed dashboard, few know how to integrate dashboards into their own operation.
That process should begin with a thoughtful analysis about which metrics those data management dashboards need to show. While there are obviously similarities between financial advisory firms, every company has its own set of priorities and operational nuances. Designing customized dashboards to address those priorities requires a “storyboarding” process on the front end. The storyboarding process helps integrate multiple dashboards into a form with the right information, at an appropriate pace and in a strategic manner. This discovery process helps answer critical questions, such as who is the primary audience that will be utilizing these dashboards; that is, is it clients, professional partners or primarily internal users? What are the core KPIs and metrics that need to be on those dashboards? What are the main issues these dashboards are designed to address?
ANALYZING THE DATA
Once you lay out the strategic way your dashboards will be used, the next step in a seamless integration process is to dig into the data-related details so that the actual integration of the data can be done on the back end.
Companies need to determine if they will be using one consolidated dashboard or a set of strategically laid out dashboards that incorporate all of their different platforms. First, examine where your data “lives.” One set of metrics might come from one source, another from a different piece of software and another from an entirely different spreadsheet. With a roadmap in place, the dashboard can be built to pull all of those disparate data streams together.
The data that may become part of the dashboard encompass a wide range of measurables. They include internal KPIs like gross revenue, direct and overhead expenses, net operating profit, gross profit margin, percentage of revenue from new and existing clients, client retention rates, asset retention rates, average revenue per client and the distribution of revenue per client. When it comes to client deliverables, dashboards can track and display variables like high-quality money market funds for cash investments; high-quality corporate bonds, U.S. treasuries, municipal bonds and preferred stock securities for fixed-income; large-cap growth and value, dividend-growth stocks, mid-cap growth and value, small-cap growth and value, and international equities for equities; and real estate investment trusts, commodities, master limited partnerships, high-yield bonds and long-short funds for alternative investments.
Because many financial advisory companies already have some kind of basic dashboard or reporting system in place, it makes sense to appreciate the specific challenges associated with moving from one dashboard platform to another, as well as best practices that can help ensure those challenges are addressed and the transition is seamless.
Transition planning. Financial firms looking to switch from one dashboard to another will frequently need to start from the beginning. Understand that no two tools are going to interpret and manage the data the same way. It is important to have some resources in place to streamline the transition. Companies should anticipate going through a quick storyboarding process, followed by a data assessment (determining what the data is, where it lives and ensuring it is in the right format). When a company relies on outdated software, accessing source data can be tricky and may require either a dashboard specialist or an IT consulting company to retrieve and unlock inaccessible data. But some dashboard consultants can provide sophisticated data integrator tools to make this process much easier and more efficient.
Integration tools. If there are any data issues (gaps in data or numbers entered incorrectly, for instance), the dashboard planning process will reveal them. The best data integrator tools provide powerful mechanisms with which to avoid outsourcing IT services or paying for outside consulting to help process and clean up data. These tools identify and filter out duplicates and gaps in the data in order to drive a report or fuel a dashboard. The result is that what might have been a tedious and expensive process becomes smooth and seamless.
Fortunately, the best providers of dashboard services understand how to keep the implementation period down to around two weeks. Companies can typically keep standard reporting in place during that period, usually resulting in minimal downtime and a negligible impact on overall operations. Once these dashboards are in place, they will evolve and adapt as your organization’s needs change, automatically updating as new clients and new data are added. Any future changes in financial software or business intelligence systems are greatly facilitated. With the right dashboard solution in place, moving from, say, Quickbooks to Jack Henry can be as straightforward as copying and pasting the dashboards and then pointing the data to the new system.
For financial advisory firms, wealth management experts and financial services professionals, engagement is a critical piece of the dashboard puzzle. From an integration standpoint, engagement in the design process and in the data that is being used (either internally or being delivered to their clients and professional partners) is crucial.
Once a dashboard solution has been efficiently and effectively integrated, it becomes a powerful tool for clarity and understanding — both internally and for clients.
Dashboards are particularly beneficial for financial companies that routinely present their clients with some kind of reporting or documentation. Dashboards help clients understand that the money their wealth manager or financial advisor is managing and investing on their behalf is going to the right places and is generating acceptable returns. Typically, regular client meetings involve clients simply asking about the bottom line number. With a dashboard, clients start seeing all the work that has been done on the back end: not just the big picture, but also the individual pixels that make up that picture. Public-facing interactive dashboards allow clients to log in and not only see investments, returns and percentage of growth, but to dig deeper into the numbers to visualize trends and strategic direction.
For financial professionals, the appeal is obvious. Instead of trying to find numbers from multiple different systems, and relying on spreadsheets and reports that can range from confusing to indecipherable, dashboards allow users to engage in those metrics. Dense thickets of numbers and data become clear and compelling visuals, and allow users to identify and show value in an information-rich format that is aesthetically appealing and highly intuitive.
Read next: Creating Customized Client Dashboards
DASHBOARDS IN ACTION
Consider the following real-world examples of how dashboards can help financial consulting companies and their clients understand their data and optimize their engagement:
Company Vitals. Company Vitals is an organization that specializes in using its finance expertise to help entrepreneurs, CEOs and business owners discover common problems and challenges, gain clarity, increase cash flow, optimize time usage and improve profitability. Because their primary clients are entrepreneurs, however, Company Vitals is often challenged with the need to explain a financial principle or metric to a client who isn’t necessarily finance minded. In many cases, they would spend hours trying to help a client understand their data. The firm was faced with the growing need for a solution that would allow them to turn their Excel spreadsheets into something more meaningful.
After an extensive evaluation process of nearly 20 different software providers, Company Vitals selected a hosted solution that allowed them to implement a dashboard platform without having to invest in IT resources or a server, and making it possible for them to pull data directly from their Excel spreadsheets. The software’s standout graphics, expansive chart library, drilldowns, range sets and filtering options provided the perfect combination of features for Company Vitals and its clients.
With the dashboard solution in place, Company Vitals now has the resources to help its clients visualize what is happening both financially and operationally through dynamic dashboards. Instead of spending hours trying to define a concept, it is able to show complex ideas that clients understand instantly, without sorting through hundreds of rows of data. The organization regularly relies on scoreboards and dashboards both internally and externally. Its clients love the eye-popping visuals and interactive intelligence within the dashboards, and decision makers within the organization value their new ability to see their key performance indicators at a glance — information that results in more effective decision making.
Turn10. Turn10, which specializes exclusively in government contracting and helping startups, mid-size and multi-million dollar companies position themselves for success, turned to data management dashboards primarily as a tool for communication and clarity. Turn10 improves financial processes, manages budgets and cost proposals, works with the Defense Contract Audit Agency (DCAA) and implements accounting systems including Deltek GCS Premier for companies across the country. As an outsourcing firm, effective communication is a crucial component to Turn10’s success. It’s the responsibility of any CFO to communicate with the company’s executives, and, as acting CFO for a number of organizations, Turn10 was faced with the unique challenge of developing an effective means of communication that would be compatible with a variety of executives and across differing business sectors. With a growing client base, an influx of data and unique communication demands, Turn10 was in need of an effective method to organize and translate information into something more meaningful.
Turn10 ultimately selected a user-friendly dashboard solution that is compatible with Microsoft Excel and delivers custom, interactive dashboards without any programming or back-end coding. Visually dynamic graphs and colors make it easy for clients to evaluate, and this new visual translation of their data has helped Turn10 clients identify trends, opportunities and issues far faster than ever before. From a resource perspective, dashboards have saved the firm many hours, enhanced client communications and improved data accessibility.
Dashboards do not just make things clearer or more intuitive, they facilitate deeper insights and understanding, which can literally make a million-dollar difference. Consider one recent example where a dashboard user was able to review a company’s evaluation before advising a client on whether to pull the trigger on a $1.2 million purchase of a group of assets. An initial accounting review presented 10,000 rows of Excel data that suggested a profit gain. After manipulating and analyzing the data with a dashboard, it became clear that it was actually a loss position. The client was able to walk away from the deal, saving millions of dollars that it would have never recuperated.
For financial professionals, effective dashboard integration is ultimately about making your job easier: helping you analyze the numbers, make the right moves and present the results to clients. A high-quality dashboard makes these connections clear, and does so in a way that is both simple and completely automated. It allows clients to appreciate the hard work and strategic decision making you’ve been engaged in on their behalf. It is not just data-rich and superb at conveying detailed depths of information; its supremely visual and comprehensible nature gives you something to look at with your clients. This means that, in a very real sense, it is also a relationship building mechanism and, in a relationship-driven industry, that can translate into a defining competitive advantage.