Leaps and bounds

There is a perception held by some in the industry that technology promises much but delivers less. This may be because technology companies are guilty of focusing on the big picture and how technology has the potential to revolutionise the way the industry operates. In reality many IFAs are already benefiting hugely from technology, a fact that can be proven if we focus on the practical areas where IFAs are using it in their everyday work processes.

IFAs want technology that adds immediate value to their business. This is where their focus is. The broader vision may not be applicable to their business right now, but it must not be ignored totally because it is likely to become a reality in the near future. However, it is worth taking matters one step at a time as the technology applications IFAs can benefit from now are the first step towards achieving the bigger picture.

Technology is already supporting key parts of the IFA sales process. By taking a look at some of these key areas, we can see how IFAs are benefiting from technology and consider what they should look for when selecting a supplier.

On the net

Web-based product research tools enable advisers to research the companies and products they recommend to their clients. They give the adviser instant, accurate information on hundreds of products from all the major product providers serving the intermediary market.

IFAs can search, view and compare all the products available in clear, simple, tabular formats on screen. Providers or products that do not support the features needed for a particular customer can be filtered out and the results of the searches can be printed to keep in client files.

Getting a quote

Perhaps the most use for technology is for obtaining quotations. Most IFAs use online services to get quotes directly from product provider extranets, or from an IFA portal that enables them to compare quotes from different providers. Obtaining online quotes saves IFAs a huge amount of time and is one of the clearest examples of the fact that IFAs are benefiting significantly from technology. No one wants to return to the days when they had to post client details to a number of product providers, wait several days for the quotes to return and then compare them manually.

Once a product has been recommended IFAs can print a fully compliant and client specific illustration. There are also online document libraries containing product key features documents that can be printed for all quotations, along with a whole host of other supporting documents such as technical brochures, trust forms and sales aids. This saves the adviser time and effort because they do not need to phone a provider branch for the paperwork to present to clients.

A newer development where technology is helping IFAs is the online submission of new business application forms directly to product providers, with some offering instant cover in the majority of cases. The benefits to IFAs are clear for all to see. By using common applications and business processes, costs can be reduced, time saved and client service improved.

However, there are still issues to overcome before electronic submission is widely used by IFAs, as opposed to being seen as useful in principle. At the moment IFAs are rarely incentivised to use these new services and so are reluctant to change the way they conduct business. The introduction of exclusive electronic products with improved terms for IFAs and their clients is a key driver of the widespread adoption of electronic transmission. When these become more widely available, IFAs will be more likely to change their business processes.

Once IFAs can submit forms for the majority of products to most providers, they may be more inclined to invest their time and resources into adopting electronic transmission processes into their business.

There are now a number of technology suppliers providing the services detailed above. So how do IFAs select a supplier? The key is which supplier adds the most value to an IFA's business.

With so many different applications or products available there is a danger IFAs will end up dealing with many different technology suppliers. A simpler and cost-effective approach is to deal with one supplier that can provide all these services via a single trading platform.

But not all trading platforms are equal and IFAs still need to decide which one offers their business the best value. When performing a comparative quote IFAs will want to search from the broadest range of product providers necessary to show they have searched the entire market. They will also want to do this for the widest range of product types possible. So when selecting a trading platform to use, IFAs need to consider which one has the most complete service in terms of product types, number of providers and range of services.

Weighing up the benefits

It is also worth considering which service is the easiest to use and offers expert technical support. IFAs are not technology experts, they are experts at giving professional financial advice. Technology merely helps them do this. It is worth looking for a technology supplier who realises this and provides the necessary customer care in the form of a help desk and wide-ranging training courses.

This year we are seeing significant developments in the technology that is available to IFAs, in particular the introduction of business administration systems that are fully integrated with the existing services on offer electronically.

These business administration systems are based around a central customer database and include customer relationship management (CRM), fee and commission accounting and work-flow modules essential for the efficient and profitable running of an IFA's business. They give IFAs a single, secure system that stores all their client records, contact history and policy details, giving them a concise view of each client.

There are many potential benefits available to IFAs using these systems. First, they can enable them to increase business from existing clients. Most IFAs focus on new client acquisition because they are not in a position to 'farm' their existing client database. By implementing a single customer database and CRM functionality, IFAs can increase the percentage of business written from existing clients.

Streamlining administration processes can enable IFAs to reduce costs by improving the ratio of administrators to advisers. The compliance burden can also be reduced by setting up appropriate workflows. These enable the compliance department to mandate the specific processes that need to be completed before moving onto the next stage. This reduces the need to manually check individual advisers' sales processes as well as the number of compliance visits to remote offices.

The process for handling commission from providers can also be automated, thereby streamlining the month-end reconciliation and processing for the accounts department.

The real value of these systems is that they can be hosted by a third party, on centralised servers, which can be accessed online for a monthly fee. This removes the headache and cost for an IFA of operating a complex IT system internally.

These business administration systems, integrated with the existing trading platforms, can support an IFA's business process from initial contact with the client all the way through to ongoing policy servicing and client relationship management. This is the latest stage of end-to-end transaction processing in the IFA market. The next stage will be to link these systems directly to the back-office systems of product providers to enable direct processing from initial client contact to policy redemption.

But that is the future. The focus for the present should be on where technology is already benefiting IFAs on a practical level and what other services are available that could add extra value to their business.

Stephen Wynne-Jones is head of life and health protection at The Exchange