98% Data Migration Success: Seamless Transition for 150 Accounts

98% Data Migration Success: Seamless Transition for 150 Accounts

Executive Summary

Summit Capital faced a critical challenge: migrating data for 150 client accounts acquired from a retiring advisor while ensuring accuracy and minimizing disruption. Golden Door Asset developed a customized data migration strategy, leveraging advanced data mapping and validation tools. This resulted in a 98% data migration success rate, allowing Summit Capital to seamlessly onboard new clients and immediately provide uninterrupted, high-quality service.

The Challenge

Summit Capital, a growing Registered Investment Advisor (RIA) firm managing over $500 million in assets, recently acquired a book of business from a retiring advisor. This acquisition brought 150 new client accounts into their portfolio, representing approximately $30 million in assets under management (AUM). The challenge lay in the seamless migration of these accounts' data – including client demographics, investment holdings, transaction history, tax information, and account agreements – from the previous advisor's legacy systems to Summit Capital's modern platform.

The existing data resided in a combination of outdated CRM software, disparate spreadsheets, and even paper files. The format and structure of the data were inconsistent and incompatible with Summit Capital's systems. Manual data entry was deemed too risky due to the potential for human error, which could lead to inaccurate portfolio valuations, incorrect tax reporting, and regulatory compliance issues. A single data entry error could potentially result in a compliance violation, incurring fines upwards of $5,000 per instance, not to mention reputational damage.

Furthermore, the timeline for the data migration was tight. Summit Capital aimed to complete the entire process within 60 days to minimize disruption for the newly acquired clients. Any delay in accessing accurate client data could negatively impact client relationships and hinder Summit's ability to provide timely investment advice. Imagine a scenario where a client, unaware of the data migration, requests a withdrawal of $50,000 based on outdated account information. Such an error could lead to dissatisfaction and potentially the loss of a valuable client. The cost of acquiring a new client is estimated at $1,500 to $2,500, making client retention during this transition paramount. Failure to properly migrate and reconcile data could also expose Summit Capital to legal and financial liabilities, especially regarding accurate cost basis reporting for tax purposes.

The Approach

Golden Door Asset partnered with Summit Capital to develop a comprehensive data migration strategy focused on accuracy, efficiency, and minimal disruption. Our approach comprised the following key steps:

1. Data Assessment and Planning: We began by conducting a thorough assessment of the data sources, formats, and quality from the previous advisor. This involved analyzing sample datasets, identifying inconsistencies and missing information, and defining data mapping rules. We documented all data fields and their corresponding values in both the source and target systems.
2. Data Cleansing and Transformation: Leveraging Alteryx, a powerful data analytics platform, we implemented a series of data cleansing and transformation workflows. This involved standardizing data formats, correcting errors, removing duplicates, and filling in missing information wherever possible. We prioritized data accuracy and completeness by validating key fields against external databases and regulatory requirements.
3. Custom ETL (Extract, Transform, Load) Script Development: Given the complexity and unique requirements of the data migration, we developed custom ETL scripts to map data fields between the legacy systems and Summit Capital's platform. These scripts were designed to handle various data formats and ensure data integrity throughout the migration process. This involved careful consideration of data types, field lengths, and data validation rules.
4. Data Validation and Reconciliation: After migrating the data, we performed rigorous data validation and reconciliation to ensure accuracy. This involved comparing the data in the source and target systems, identifying discrepancies, and resolving any errors. We used a combination of automated checks and manual reviews to validate the data.
5. Phased Migration and Testing: To minimize disruption, we adopted a phased migration approach. We migrated a small batch of accounts initially and conducted thorough testing to identify any issues. Based on the test results, we refined our processes and migrated the remaining accounts in batches.
6. Ongoing Monitoring and Support: After the data migration was complete, we provided ongoing monitoring and support to ensure the integrity of the data and address any issues that arose. This included providing training to Summit Capital's staff on how to use the new system and troubleshoot any data-related problems.

Our strategic decision framework focused on mitigating risks associated with data loss, inaccuracy, and compliance violations. We prioritized data security and privacy throughout the entire process, adhering to all relevant regulations and industry best practices.

Technical Implementation

The technical implementation involved the following key steps and technologies:

• Data Extraction: Data was extracted from various sources including CSV files, Excel spreadsheets, and a legacy CRM database.
• Alteryx Workflows: We utilized Alteryx to create automated workflows for data cleansing, transformation, and validation. These workflows included steps for:
  • Data Standardization: Standardizing address formats, phone number formats, and other data fields to ensure consistency.
  • Data Cleansing: Removing duplicate records, correcting typos, and filling in missing values where possible.
  • Data Transformation: Converting data types, mapping data fields, and creating new data fields based on existing data.
• Custom ETL Scripts (Python): We developed custom Python scripts to handle complex data transformations and integrations that were not easily achievable with Alteryx. These scripts were used to map data fields between the source and target systems and to perform data validation checks.
• Database Integration: The transformed data was loaded into Summit Capital's portfolio management system using SQL scripts. We ensured that the data was loaded correctly and that all data relationships were maintained.
• Data Validation: We implemented a series of data validation checks to ensure the accuracy of the migrated data. This included comparing the data in the source and target systems, verifying that all required data fields were present, and checking for data inconsistencies. We calculated key metrics such as average account value and asset allocation percentages in both systems to ensure that the migrated data was consistent with the original data.
• Security: All data was encrypted during the migration process to protect client privacy and security. We followed industry best practices for data security and complied with all relevant regulations.

For example, cost basis data required specific transformation. If the legacy system stored cost basis using the "FIFO" (First-In, First-Out) method, and Summit's system preferred "Average Cost," our script dynamically calculated the average cost basis for each holding based on the transaction history extracted from the legacy data. This calculation adhered to IRS guidelines for cost basis reporting, minimizing the risk of tax errors.

Results & ROI

The data migration project yielded significant positive results for Summit Capital:

• 98% Data Migration Success Rate: We successfully migrated 98% of the client accounts with complete and accurate data. The remaining 2% required minor manual adjustments due to unique data formats or missing information.
• Reduced Risk of Errors: By automating the data migration process and implementing rigorous data validation checks, we significantly reduced the risk of errors. This saved Summit Capital an estimated $10,000 - $15,000 in potential compliance fines and avoided reputational damage.
• Faster Onboarding: The seamless data migration enabled Summit Capital to onboard new clients quickly and efficiently. This allowed them to start providing investment advice and managing their portfolios without delay. The onboarding time was reduced from an estimated 2 weeks per client to just 2-3 days.
• Improved Client Satisfaction: By ensuring accurate and complete client data, Summit Capital was able to provide a higher level of service to its new clients. This resulted in improved client satisfaction and retention. A post-migration survey showed a 95% satisfaction rate among newly acquired clients.
• Increased AUM: The successful data migration and seamless onboarding of new clients contributed to an increase in Summit Capital's AUM. The $30 million in newly acquired assets were quickly integrated, contributing an estimated $240,000 in annual revenue (assuming an average advisory fee of 0.80%).
• Time Savings: By automating the data migration process, Summit Capital saved significant time and resources. Their staff was able to focus on providing investment advice and managing client relationships, rather than spending countless hours on manual data entry and reconciliation. The estimated time savings were 200+ staff hours, freeing up resources for revenue-generating activities.

Key Takeaways

Here are some key takeaways for other RIAs facing similar data migration challenges:

1. Invest in thorough data assessment: Before starting any data migration project, take the time to thoroughly assess the data sources, formats, and quality. This will help you identify potential challenges and develop a comprehensive migration plan.
2. Automate the process: Automate as much of the data migration process as possible to reduce the risk of errors and save time and resources. Consider using data analytics platforms like Alteryx and custom ETL scripts to streamline the process.
3. Prioritize data validation: Data validation is critical to ensuring the accuracy of the migrated data. Implement rigorous data validation checks throughout the migration process and perform thorough reconciliation after the migration is complete.
4. Adopt a phased approach: A phased migration approach can help minimize disruption and identify any issues early on. Migrate a small batch of accounts initially and conduct thorough testing before migrating the remaining accounts.
5. Focus on client communication: Keep clients informed throughout the data migration process. Communicate clearly about the timeline, potential disruptions, and the benefits of the new system.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors streamline client onboarding, improve investment decision-making, and enhance client communication. Visit our tools to see how we can help your practice.