Selecting the right technology services


    Twenty years ago you could tell at a glance if an IFA was successful by the number of Bisley filing cabinets in their offices and the height of the papers piled on top of them.

    The advent of desktop computing, followed by the internet, has changed the interior design of offices, but not solved the continuing problems advisers need to tackle for their clients.

    In fact, just as the rubber plant fell into the skip, a new problem was added to the list: how to select the right partners when looking for integrated technology assistance. The aim is to take the advice process, investment management, custody and record keeping through a digital process, and to get rid of the filing cabinets.

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    In the context of rising and possibly exaggerated expectation of its potential, IFAs started to use technology for customer relationship management (CRM), recording basic customer details, to drive efficiency into communication and to record personal financial data, principally investment details.

    When shares and funds dematerialised, the opportunity to integrate custody, reporting, income collection and cash accounts into this framework gave rise to the platform market we see today.

    There exists now a landscape in which a confusing range of platform-like capabilities are on offer to advisers from a number of quarters either directly or through proxies, but principally from investment management firms, life insurers, networks and financial software specialists.

    Advisers have switched on to the benefits of service outsourcing but now want more than to fit into the platform provider’s own business model. In this aspect there are threats where the platform is provided by organisations whose plans look beyond IFA-led distribution to a brave new world of Direct to Customer (D2C) servicing, or to restricted, direct sales.

    Maybe more important – if less dramatic – is the issue of whether advisers have any ability in their platform relationships to flex the system’s technology and service architecture to support the adviser’s brand identity and service proposition, whatever the adviser’s business model dictates.

    If this flexibility is absent the commercial end point is accepting continued existence as a tied agent, which in the end may come as a surprise to both client and adviser alike.

    The alternative will be a relationship with businesses that can be described as ‘insourced service providers’, in a partnership model, within which the advisory firm defines its needs of technology to deliver its own customer proposition, to underwrite its brand value and support its precise business model.

    Advisers are looking for more than custody, in the ability to deliver an overall investment proposition, towards a range of configurable services.

    Fundamentally, the aim is to verifiably control assets under management to drive business value and sustain profitability.

    These services, from an insourced provider, include an integration of activities through a branded website, advice and fact finding process, risk profiling through the selection of investment solutions whether modelled or managed under discretion, branded applications, adviser charging administration and ongoing customer service tools.