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The importance of having clean data and how to achieve it

By James Hoey

Updated on Friday, 8 September, 2017

One of the biggest challenges a fund house faces in the modern day, apart from their investment strategy, is trying to ensure that their data is accurate, clean and reliable. Amongst others, challenges include meeting regulatory guidelines, reputation management and supporting the sales team.

Meeting regulatory requirements

Rapidly changing regulation with greater emphasis on transparency and increased reporting requirements have added to the data management challenges of asset managers. Not only do firms have to ensure that all their data is accurate and timely, for regulations such as MiFID II, they also have to include completely new data fields with increased disclosure frequencies and disseminate the reports to a much larger number of organisations. For example, MiFID II alone could double reporting volumes, with data needing to be presented within a specific timeframe and in a specific way to the regulator and to various tax authorities across the globe.

Despite the fast-approaching deadline of January 2018, according to consultant Opimas, roughly 50% of asset managers have not yet begun talking about implementing MiFID solutions.  The danger for these firms is that they risk big fines for non-compliance if they are not ready and they may have significant work to complete in cleansing their data before even putting solutions into place to comply with the new legislation. Crucially, this lapse in data management may mean they risk losing out to competitors who may be much better prepared and as a result, miss opportunities to convert the changes brought by MifID II to their advantage.


We all know that an asset manager’s data is one of the cornerstones of their business. Clean, reliable data portrays the asset management firm in the best possible light and therefore is highly valuable.

The knock-on effect of having data inaccuracies or inconsistencies is that the reputation they work so hard to cultivate can be damaged irreparably, as under new regulation they may be punished severely for even the smallest error. The potential financial loss and reputational damage caused by inaccurate data is something asset managers want to avoid at all costs.

Linked to reputation, is the point that, when the sales team of an asset manager visits an institutional investor, the data being provided by the asset manager must be accurate and clean. Of course, the worst-case scenario is that the data that institutional investors receive is simply incorrect. In a recent by the Economist Intelligence Unit, it’s said that one in five asset managers names incorrect data as one of the biggest issues they face.

For a financial adviser or institutional investor who will have an array of choices when it comes to where to invest their clients’ money, the assurance that the data provided to them is accurate and reflects what their clients may see on research sites is one of several deciding factors for them when making a final investment decision. Fund data which is inconsistent, can negatively impact the sales team’s efforts to convince investors to choose them.

Instead, having clean data will increase the efficiency of a sales team because it can focus all of its energy in being proactive and using precious client facing time to build relationships rather than addressing issues about incorrect and unreliable fund data.


For asset managers, the amount of new regulation has caused many to re-evaluate and start to maximise efficiencies with regards to their internal processes. The pressure is much greater on the middle office to provide up-to-date information and many institutions are finding the process challenging. The costs involved in preparing for the introduction of new regulation can be enormous, therefore one solution may be to save money by employing third-party specialists to take on the burden and guarantee that all the necessary deadlines are met.

It is however important to note that regulation specifies that fund groups take extra caution when outsourcing data management to third parties. The regulation states: “Asset managers should remain alert to the risks of surrendering too much control over key data and mitigate these accordingly.”

The ever-growing sophistication of data dissemination services also means that an asset manager doesn’t have to integrate its data into marketing collateral by itself either. Many providers, like FE, have the expertise to take the asset manager’s data, clean and validate it through layers of stringent checks and then disseminate this golden source of data out to all the appropriate recipients, whether that be vendors, platforms, supermarkets, regulators, distributors or institutional investors.

This removes the burden of having to collate your data and incorporate it into the many channels of distribution, as well as the inconsistencies that inevitably arise throughout the process if your in-house data management processes are not at the required standard.

With less than 4 months left until MifID II comes into force, asset managers still have a tough challenge ahead of them in order to hit the ground running on 3rd January 2018. As the Optimus report stated, roughly 50% are not currently ready or on track to be so. For those who have planned well, and as long as those who haven’t can get their house in order with regards to data management, they should be able to meet the deadline. Using third party dissemination specialists and expertise will certainly go a long way to helping them in doing this.