Some products are easy to arrange. The application process is smooth and efficient and all the paperwork and reports arrive exactly when expected and are right first time. All advisers will, however, be familiar with products which are far harder work to arrange.
The product proposition and benefits may be perfect for your client, but the application process is tortuous and is followed up by inaccurate or incomplete paperwork.
So what is the difference? Why do some providers seem to get their product administration right first time – while other products are a nightmare? A large part of the answer comes down to whether administration and service was carefully considered as an integral part of the product development process.
Clearly advisers have to recommend the products that meet the needs of their customers but two identical products offered by similarly strong and recognised providers could have very different user experiences in terms of ease of application and quality of customer service. This means that service and administration are valuable and positive differentiators in an increasingly competitive and demanding market.
It is easier (and less expensive) to consider service quality and administration requirements at the outset and integrate them into new proposition design than it is to try and ‘retrofit’ later.
As a result, the shrewdest product providers are now taking administration into account at the earliest stage of the development process. Many now engage third party administrators (TPAs) in product development.
By working closely with their TPA, product providers are finding that they can launch products with ‘best in class’ administration. I have put together a five-point plan for product administration perfection. This information is invaluable to advisers too. After all, if you know what works well, you can select products for your clients that tick the ‘easy to administer’ box.
1. Engage with stakeholders at the outset
Most product developers at providers are actuarial, technical and marketing experts. They follow developments in the market and continuously look for innovative ideas that can be developed into exciting new products. They are not always experts in administration and most will not have offered face-to-face advice to clients.
By bringing together everyone involved at the outset, a better product can be developed. As advisers, you will quickly be able to see what will be attractive to your clients. Administrators work across a wide range of products in the market, so will be able to offer guidance about best-in-breed products. Other stakeholders, such as compliance specialists and adviser trainers will be able to identify potential problem areas before the product is finalised.
From the providers’ perspective, getting the product spec right at the outset is essential. Once the TPA starts building the admin system, as a small change in spec can have huge knock-on implications in terms of cost and time delays.
2. Plan the customer journey
Product developers also need to think carefully about how you will work with your client. Increasingly applications are now made online, rather than on paper. Getting this part of the process right can make your job as adviser far easier and can simplify the online application process for your client.
Too many online application forms try to replicate the old paper-based application process and include questions that you will have covered as part of your fact-find and know-your-customer process.
Of course it is vital that you capture all of that information for your own records, but it rarely needs to be included in the application process, where it clogs up and slows down the administration process.
The best online application forms have clear signposting which explain what steps need to be taken – and how far through the application you have progressed. Ideally online applications forms should be designed to minimise re-keying. If information is needed to be entered on one screen it should be automatically completed if required again further on in the process.
Developers also need to think about the actions required by advisers and their clients during the application process and simplify procedures wherever possible. This could be by removing complex or repetitive questions, or by adding automated links to additional services, such as anti-money laundering systems, which can significantly speed up processing.
3. Beware unnecessary complexity
Providers also need to be cautious about over complicating products. Of course the product needs to offer complete protection and flexibility to your clients, but some products have additional features which are rarely used and simply add complexity. Benefits are often added to make the product stand out in a competitive market and may include discounts on health or fitness-related purchases, guaranteed options, phased divestment, waiver of premium, family income benefit, terminal illness benefit, children’s benefit or a host of other options.
The real risk is that this ‘arms-race’ in benefits makes the product harder for your client to understand and can also slow down the administration process.
Avoiding complexity also means making sure that terminology is easy to understand for your clients. The best products avoid overly legalistic jargon and makes sure that all premium and benefit figures are clear and easy to understand. TPAs often have standard documents written in plain English which have been refined through experience across the market.
4. Learn from experience
Many new products are developed to respond to a change in the market conditions. You need these new products to be available quickly so that you can provide the best possible service to your clients. By working with specialist TPAs, product providers can launch straightforward new products in a matter of weeks. The key for providers is to keep the initial launch simple. It is far easier to learn and refine a product, than to go for an all singing, all dancing product that is hard to understand and complex to administer.
Even when speed to market is not essential, running a product pilot can identify and iron out any issues quickly and easily.
5. Walk in the customers shoes
Finally, it is important for providers to think about the product from the end customers’ perspective. You will have spent a lot of time explaining the product and its benefits to your clients, but it is a fact of life that in many cases they will not look at their product again for a long time. If it is a protection product, they will need to take no action until they need to make a claim and even investment products may be left to accumulate without change for many years.
This means that it needs to be simple and straightforward for you and your client to make claims or changes many years down the line. For clients in particular, the passage of time means that they may have difficulty in recalling exactly what additional benefits their product provides.
I have never come across a product that can not be administered efficiently, but there is no doubt that some products work far more smoothly than others. By working in partnership with their TPAs and other stakeholders, product providers can develop products which meet your clients’ needs, and are painless to administer too.
A product that is simple, straightforward, clear, automated and personal leads to a happy client – which is good for us all.
Stuart Ward is head of business development of Opal
