The majority of IFAs believe that over half their business with product providers will be conducted ...
The majority of IFAs believe that over half their business with product providers will be conducted electronically within five years, according to research conducted by COVER magazine in association with Hannover Life Re.
The survey of 181 IFAs revealed that the internet, in particular the use of business technology in the sale of protection products, is becoming of greater interest to IFAs. While most financial advisers admitted that they still rely on traditional methods in their dealings with product providers, they felt that the internet will soon become the most accepted way of transacting protection business. More than 41% of IFAs believe that within five years, over 50% of their dealings with protection providers will take place online.
The survey highlights the growing confidence of IFAs in using the internet as a business tool in order to expand their company. 97% of IFAs now have access to the internet and almost 90% said they currently use it for business information.
Gavin Stewart, e-commerce director at Scottish Amicable, said: "This is promising, but the take-up of end-to-end services between IFAs and providers will become significantly faster in the future. Over 50% of business could be electronic within three years."
More than 50% of IFAs stated that they now have their own business website, and it was perhaps because of this that only 8% felt that their own lack of technical skills would represent their single biggest problem when conducting online business.
Just under 40% of respondents said that their largest worry with e-business was the potential problems that could arise from data security. Diana Harding, business development manager, marketing, at Canada Life, said: "There is a lot going on with this, but companies have still got to get the confidence of the public to show that their details are going to be safe."
Most IFAs thought that future developments would bring greater online interaction with protection providers and faster application processes. Online applications were considered an important benefit, but 60% of respondents believed that the greatest single benefit would come from online quotations. Attracting new business through email campaigns and servicing existing clients via the internet was thought to be less important than their dealings with providers. The research indicated that there was less optimism among IFAs about the level of client interaction which would take place via the internet in the future with most predicting that between 10-30% of business would be conducted online.
Most IFAs felt that products such as term assurance, accident, sickness and unemployment cover, critical illness, income protection and private medical insurance would translate well to e-commerce.
