Future perfect

'IFAs are sitting on the threshold of technology driven changes that will redefine the way this industry works.'

This probably reads like the sort of prediction trumpeted by many commentators in the industry for the last five years. It is certainly true to state that the advancement of new technology has been more of an evolution than a revolution as far as IFAs' businesses are concerned. But we are now better positioned than ever to start reaping the benefits of all the industry, provider and portal initiatives that have been creating the platform for the IFA office of the future.

IFAs are fully aware of the well-documented challenges affecting the industry and, to their credit, most of them are beginning to look for ways to exploit the emerging business environment. Technology is not a new innovation, but can be harnessed more than ever to help IFAs respond and position themselves in the new market.

Over the last 10 years, we have seen electronic services used to great effect. Comparative life and protection quotes have been sourced electronically for a long time, products are researched using online databanks, compliant client documentation can be downloaded from the internet in seconds and most IFA firms now have a website of some description. In addition, emerging services allow new business application forms to be submitted electronically and policies underwritten and placed on risk in minutes. There is also an increased provider emphasis on developing services to access the vast amount of your client's data that they hold on their mainframes.

Accessing technology

There are significant benefits to be had from using these electronic services. Unfortunately, the problem most IFAs have today is how to use them within a seamless business process, which by definition has to have a non-technology-based element.

In practice, IFAs use technology services that are often accessed in different ways, use different data and involve differing degrees of manual input. Traditionally, there has been little connection between them, and record keeping has therefore been handled in different ways with little linkage back to client records.

So although the technology is delivering benefits in terms of accessing data electronically, the actual IFA sales chain is by no means a seamless process. In particular, client data is not held and sourced centrally, and it is not used in other aspects of research, application, servicing and marketing. Integration of services and client data is therefore the 'Holy Grail', an ideal scenario that many IFAs want, but few have access to.

But there is a new breed of technology that will help IFAs succeed in our dynamic environment. They will be able to run their businesses on a single technology platform, which automates the entire sales and client management process.

From fact find and initial contact, through quotes and transaction, to policy servicing and client management, IFAs will have access to integrated technology that will reduce the administrative costs of doing business. IFAs will only have to enter data once, after which all client information will appear pre-populated, whichever part of the system the IFA is using.

The real beauty of this is that IFAs will not necessarily have to spend huge sums of money buying and developing complex IT systems. It could all be outsourced. All the software required could be hosted and managed by a third-party company through high- performance web servers. All the IFA needs is a web browser to access the system, removing the need to have expensive hardware on balance sheets that is not counted as an asset by the regulators. In addition, updates happen automatically without the cost and disruption that this usually causes, data is backed up regularly and is completely secure.

This may all sound like a pipe dream, but it is not very far away. Indeed, much of this technology is already in place.

If we take a look at the applications that are currently available to IFAs, we can then explore what needs to be added to create the office of the future.

For the majority of IFAs, online comparative quotes are now an integral part of their business processes. These quotes are delivered via portals that are becoming richer in content and transactional capability.

But this is not where the story ends. IFAs can also access fully compliant and accurate client documentation, a wide range of product research tools, email and up-to-the minute news stories as they break. They can also review client transactions, save quotes, access document libraries and link through to related services particularly from product providers.

The industry's latest innovation has certainly been the hardest nut to crack. Indeed, the introduction of new business transactions has perplexed the industry for over 10 years. But using the Origo industry standards and following significant input from the IFA community can now submit fully validated product application forms electronically and in some cases get a decision back in minutes. The benefits to IFAs are clear. Using common applications and business processes reduces costs, saves time and improves client service.

However, there are still issues to overcome before these systems are widely used by IFAs, as opposed to being seen as 'useful in principle'. The main development needed before we see the widespread adoption of new business services is the introduction of products that are designed and priced exclusively for electronic submission. Legal & General has been leading the way and others are now beginning to follow.

These e-products are attractive to IFAs because once they are familiar with the new processes they can reduce the time it takes to service clients, with knock on benefits being enhanced terms for clients and the IFAs themselves.

The demands on IFAs to meet the regulatory requirements for academic achievement and continuous professional development continue to escalate, using up valuable time that should be spent with clients. In addition, many IFAs have training requirements in order to address changes to the market where multi-ties, new distribution channels and technology have to be understood.

Technology itself can be a solution to these problems. There are many online training programmes available, both specific to our industry and more generic, which are both interesting and effective.

Easing the burden

If we take the principle one step further, we can see how technology could help with compliance. Currently, regulators and internal auditors need to come and visit and look at these types of records in a paper-based format. If training development and testing were carried out electronically, the next logical step is to give regulators access to the records electronically too.

With the pressures on margins that all parts of the industry face, anything that reduces the administrative burden within the business must be regarded as a good thing and reductions in numbers of physical visits from regulators has to be attractive.

We are not far away from advisers being able to check knowledge in any area electronically. Advisers will access a website, select an appropriate securitised test, sit the test on screen and get feedback instantly. Results could be communicated to the relevant manager within the business if appropriate and logged electronically against training and development records. At any time the records can be reviewed on screen, and development programmes created, executed and monitored.

The IFA office of the future will include an electronic administration function that will be fully integrated into these existing and forthcoming services. Client management tools will enable IFAs to create and maintain client records online, using a search tool to review client details, policies, quotes and contact history. Additional policy administration tools will allow policy records to be viewed and created, with commission details and policy valuations all easily available. Clients could have access to this information directly and securely over their IFA's website if this was how they wanted to make the data available.

Once these back office functions are integrated with existing quote and transaction services we will have the office of the future ' hosted by a third party on a single technology platform. Quote systems will be integrated with new business systems so IFAs can pre-populate the application forms with data from the quote screen. Back office systems will be integrated with new business systems so the client data can be stored automatically.

Technology is available to help IFAs throughout the sales process, from needs analysis through transactions to client servicing, with training and compliance underpinning the whole process. All these functions will shortly be integrated into a single technology platform, with the potential to completely streamline an IFA's business, redefining the way client relationships are managed and reaping the benefits of a more efficient interaction with providers.