Ian McKenna looks at new IFA technology innovations
Implementing technology was always going to be a key part of how advisers adapt to the challenges of the RDR. Increasingly, innovative technologies are coming to market to help advisers address new challenges. For example, only a couple of months ago no-one had shown me any technology-based solutions to help advisers build and benchmark their consumer propositions and how they are delivering them.
I have recently seen a number. I have been particularly impressed by the Passport software developed by Robert Reid and Roderic Rennison and will be writing more detailed commentary on this in the New Year.
Two weeks ago, I looked at new features Durell Software is delivering to help their users embrace mobile environments and I understand Avelo is experiencing considerable success with the customer portal module it delivered recently.
There are also a number of other new solutions. Some, such as the new Time 4 Advice proposition, are targeting the broad adviser market, others, such as Best Practice, are focusing on bigger firms.
With an increasing number of specialist solutions emerging, many firms want to be looking at assembling best-of-breed components. This also has the benefit of reducing reliance upon a single system supplier.More people are asking if all-embracing solutions are the right answer for many firms.
At the heart of this is the question: are such overall solutions a master system delivering a truly integrated solution, or are they really just a Jack-of-all-trades option that fail to deliver a quality end-to-end proposition, relying perhaps on one or two features, frequently commission processing? I can think of some of the major products that fall into each camp.
If the right way forward is for advisers to work with a collection of best-of-breed solutions it does, however, become crucial that these different solutions are able to talk to each other. Detailed integration between such solutions remains a challenge. Until this is achieved it will be difficult for such an approach to provide the level of economies of scale that are crucial for advisers to achieve.
The industry needs to address this issue urgently, not least because of the rapidly accelerating adoption of financial apps by both advisers and consumers. There is evidence that the ease of use and accessibility of apps is already having a significant effect on adviser behaviour.
This brings the challenge of dealing with multiple mobile operating platforms. I am aware that some people believe HTML5 will provide a single alternative to this issue, however, our own, admittedly at this point less-than-exhaustive, research suggests consumers will, in the long term, prefer mobile solutions delivered natively using their platform of choice.
The decision of Sesame Bankhall to adopt an established Australian solution to meet its RDR needs is hardly a ringing endorsement of many of the bigger UK suppliers.
I am not surprised by the move. For some time I have felt there are not enough quality, scalable home-grown systems to meet the needs of the number of major customers who need such capacity for 2013.
I can see other major companies looking further afield for suppliers if some of the small group of UK suppliers who would pass institutional due diligence cannot be seen to be delivering the content needed for the RDR with little more than a year to go. Against this background, Standard Life’s purchase of Focus Solutions looks shrewd and good value for money.
Some software suppliers make a great deal of noise about how easy it is to move data from other suppliers to their system. A more important question is how easily can you get your information out if you want to leave.
I am hearing too many stories about advisers who are trying to change supplier only to be told they either cannot have all their data or that there will be a significant cost in extracting it. This should not be acceptable and is a damning indictment of any system that cannot provide a complete data summary of all system data on demand.
I believe this should be available free of charge to any user at any time.
Equally, it should then be the responsibility any new system supplier to take this data and populate it to any replacement system.
This is not just an issue for client management systems but should equally apply in the platforms market. Overall this subject has been left unaddressed for too long. From a regulatory perspective, how would the FSA look at any firm that could not extract all the data from any system that is used as a primary method of client record-keeping?
The ability to extract all client data from any system should be a really important consideration in any software supplier or platform selection exercise. It might make sense to seek out references from organisations that used to use a supplier and find out how helpful the company was when they left.
Choosing the right software, either individually packaged or a collection of tools, will be one of the most crucial decisions any adviser takes in the run-up to the RDR.
It is really good to see new solutions coming to market to help these needs although for those who are not finding their supplier delivering, it might be pertinent to be looking elsewhere sooner rather than later to be able to have the right solution in place to trade most efficiently by 2013.
Ian McKenna is director of the Finance & Technology Research Centre