The Data Dilemma

McCarthy, Edward
June 1998
Journal of Financial Planning;Jun98, Vol. 11 Issue 3, p58
Academic Journal
This article examines problems faced by financial planners regarding the many computer programs that they use which does not share data and discusses steps that vendors and users are taking to resolve the data dilemma, as of June 1998. Greg Friedman, a certified financial planner, considers himself to be a knowledgeable computer user. As he reviewed the technology requirements of his practice, Friedman focused on several critical areas. The first area was client and contact management. The second was practice management. The third area was marketing. Even if software providers could agree on the data they will share, there are several stumbling blocks in exchanging data between programs. The first problem, defining data fields, seems almost trivial, but it is an important software coding issue. The second critical issue is data control. Software firms have tried different methods to facilitate data exchange. One approach is to build proprietary links between programs. An alternative solution is to create voluntary industry standards. Another approach is to offer software users data export methods into widely used formats. Presently there are two solutions to the data exchange problem. The first is to select a software with the goal of maximizing inter-program connectivity. The next step is to look for programs that can link with portfolio managers. The bad news is that financial planner using off-the-shelf software will continue to face the data compatibility problem for the foreseeable future. Although the software vendors of the industry recognize the problem, there is no consistent effort being made to alleviate it.


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