Most IFAs claim to be honest and have integrity but saying it and doing it are two different things
Anna Lawlor talks to Martin Andrews, a Kent-based IFA, and his database writer brother Simon Andrews about launching Swtiched-On Solutions, which it their venture to fill a gap in the IFA software market
Brothers and self-proclaimed innovators Martin and Simon Andrews established their own software provider to help smaller IFAs navigate the fee option minefield and maximise the profitability of their businesses, having spotted a gap in the market.
The brothers have distinctly different yet compatible talents and perspectives, as Martin has been a practising IFA for 20 years and was the originator of the Switch on Solutions software concept, while Simon had a varied career starting off as a trader on the London Stock Exchange before the Big Bang of 1987 forced him down another path. He got involved with data management for transport firms and put his joy of number crunching to work on databases such as Excel and Access, positioning him well for his eventual role as database developer for SOS.
The concept for the software branch of Kent-based IFA firm, Martin Andrews & Associates, came from Martin's realisation that there were no easy to use, affordable software packages tailored specifically with the smaller IFA in mind, and suitable for the fee-only adviser model.
He said: "Initially, I wanted to integrate my spreadsheets and interrogate that data, which I was not able to do in their present format. I also realised that I needed to keep a log of how much time I spent with every client to assess their profitability to my business. The software that was available was high cost, charged for each user and on an ongoing basis. So, as your business grew so did the software costs."
Back office systems can certainly be a financial drag on small firms. Including VAT and available for three users, Plum Software would cost a firm £3102, Intellifilo would cost £3877, 1st Software would cost £4272 and Durell Solutions would cost £6000 a year. Instead of CMS - client management system - SOS advocates its Business Management System, Freedom, which costs £2500 a firm, one-off payment, or £1500 for 'silver' version. Its Fee Writer software costs £175 for each user, one-off payment and the Rate Setter software costs £145 on the same basis.
Martin also felt that the systems were too client-focused and not business-focused enough, not providing the level of easily navigable yet comprehensive input and output data required. While many advisers seem to fear that taking a corporate and professional line with their business might be construed as being some-how neglectful of their clients' needs; Martin is unashamedly business-focused and that is where, he says, many IFAs go wrong with their view of remuneration options.
Martin, who worked as an adviser for Barclays Insurance Services for eight years, said: "I am totally sold on the fact that you have to charge a fee to give impartial advice. Commission-only firms need to sell a product to cover their costs. I think it is going to happen that a customer can go ahead and find a cheaper product online and cut out the IFA. My process is that I am going to advise you and that may not necessarily result in a product in the end. You pay for the advice. IFA firms are generally becoming more commercially aware; they need to focus on their businesses as well as their clients."