A Tailored Approach to Technology Conversions

Adam Anker & Bryan Brookman-Jones – 08/31/2021

What do clients need from their financial advisor? It’s a given clients need their advisor to serve as objective counsel regarding decisions that may have financial implications. However, they also need their advisor to act as a trusted source who can help them stay focused on their achievements, as well as their short and long-term goals.

From a technology perspective, data is the foundation that helps tell a client’s story. The data helps establish where the clients began, it depicts their current status, and projects the potential for future success. In the past, the notion of an advisory firm changing their wealth management technology platform was daunting simply because there was no efficient way to bring past data in to the new system.

Today, many technology providers offer to convert historical data from a firm’s previous system. But, as internal processes can differ greatly, it’s important to understand both the type of data conversion offered by a potential partner and the exact plan the team will follow. So, where should one begin when evaluating a potential new technology partner? To start, it’s important to understand the two types of data conversions and how the data is expected to appear once the conversion is complete.

Transaction Conversion
The end result of a transaction conversion is the historical data appears as if it always existed on the same platform. Advisors and their clients are able to access and enjoy all of the same reporting capabilities they currently enjoy with their present-day asset level data.

To accomplish this, the right technology partner will source positional and transactional data from custodians in order to display true end-of-day positions accurately. Or, a true “data conversion” is performed where the platform interprets transactional and pricing data from the legacy system in order to build historical sets of data that are then reconcile into the new system.

Performance Interval Conversion
In this type of conversion, firms provide monthly performance intervals to the new platform which have been calculated by the previous provider. This ensures the historical values will match what was previously reported. These intervals are then audited for inconsistencies so the firm can review and make any needed corrections. The updated data is then loaded into the new system, and a series of “post audits” are run to ensure the historical data ties correctly into the daily data.

Along with performance intervals, firms can also load a trade blotter for research and reference. Data points such as Contributions, Withdrawals, Gains, Management Fees, Benchmark Returns, and more can be loaded for each monthly period. These data points can also be loaded at a variety of levels such as by Portfolio, Household, Account, Asset Class, or Asset Segment.

Beyond the data conversion process, it is equally important to understand the level of support a firm will receive before, during, and after the data moves. Black Diamond’s implementation methodology is designed to anticipate and mitigate data conversion concerns. In fact, the team has developed and refined a phased approach that includes:

  • Dedicated Data Conversion Consultant: In addition to an Implementation Consultant, new firms are assigned a Conversion Consultant who specializes in coordinating the transition process from the legacy system to Black Diamond.

  • Historical Conversion-specific Reconciliation Team: This team of data analysts specializes in the reconciliation and repair of historical data sets from legacy systems.

  • In-house Data Conversion Product Team: This select team is available to quickly adapt to unforeseen variations in data.

  • Guided Conversion Validation Plan: The support team follows a custom data validation plan so everyone is confident with the data accuracy the first time reports are run.

  • Comprehensive Data Audits: For both Transactional and Performance Interval conversions, the Conversion Consultant takes firms through audits in order to flag irregularities in the data and provide opportunities for correction prior to loading in to the Black Diamond platform.

Overall, Black Diamond’s Implementation team consists of practitioners who are available to tackle potential conversion issues to ensure data is transitioned seamlessly, so new firms can focus on what matters most – managing their client’s financial lives.

For questions about what type of conversion works best for your unique firm, and to learn more about the Black Diamond community, request a personalized demo today.