How The Smart Use Of Personal Data Enhances Private Client Services

Thanks to the misdemeanours of some Big Tech companies, people become slightly nervous when thinking about how their personal data can be used for commercial purposes. However, provided that organisations comply with personal data regulations such as the UK GDPR and are tenacious concerning their IT security, using technology to examine clients’ personal data can provide considerable benefits to their ability to enhance and protect their personal wealth and business interests.

Using technology to identify estate planning risks

There are several threats to wealth and estate protection. Inheritance tax, relationship breakdowns, spendthrift family members, divorce, and negligent professional advice can result in the dilution of a once affluent estate. It is likely that you, dear reader, are well aware of the aforementioned threats and know that you should take steps to protect yourself and your family’s interests. However, everyday tasks such as going to work, being with your loved ones, and spending precious free moments enjoying hobbies and interests mean that most people place estate planning in the “I will look at that tomorrow/next week/next year” basket.

But what if your Solicitor could alert you to particular risks and quickly create a bespoke solution without you having to play to greater part in the process? Using AI and machine learning to scan your personal data and, with your express consent, sharing it with other experts such as your accountant, estate agent, or wealth manager, your team of professional advisors can join the dots that link their services to you together and identify risks to your long-term prosperity.

As an example, let us consider the rise in inheritance tax (IHT). In March 2022, the Office for Budget Responsibility found that between 2017 and 2021, families paid £27.2 billion in IHT. This figure is projected to climb 36 per cent to £37 billion for the period from 2022 to 2027.

A law firm that has invested in data analysis systems can use available information to "join the dots" and identify clients vulnerable to the risk of increasing IHT and other challenges that can cause family disputes. It can then proactively suggest wealth protection strategies to the client well before it becomes too late to put tax planning instruments such as trusts or gifting in place.

People remain at the heart of professional services

The above situation does not mean that you, as a client, will be automatically presented and invoiced for a service which you never asked for. Instead, it means that your professional advisors can bring new risks to your attention. Whether or not you wish to take things further remains entirely at your discretion. Furthermore, although technology may identify a risk, solutions involving complex estate planning structures such as trusts, gifting, and tax-efficient investments require human expertise and a trusted personal relationship between you and your professional advisor.

Wrapping up

Effectively using technology and client data elevates the level of service professional advisors can offer clients to an entirely new level. Rather than offering advice on one particular issue, your advisory team can collaborate to ensure all aspects of your wealth management and estate planning strategy are covered. For example, if you invest in a multi-million pound property portfolio, your data will provide a trigger to all your advisors that tax and estate planning matters must be considered. Similarly, if you purchase a business, your advisors know to alert you to the issue of succession planning, something that you may not have had the time to consider whilst pursuing the deal.

Provided that all the necessary safeguards are in place and personal relationships remain at the forefront of professional services, the use of AI and machine learning to analyse client data to identify risks and solutions provides an invaluable advantage not only to you as a client, but also to your family and legacy.

If you would like further information on the above, please contact David Birchall by clicking the 'contact us' button to email him directly or call David on 01218 274340 at our Birmingham office.