IFAs are a conservative lot. IFA Promotion has updated its website and in particular the facility for potential customers to search and find an adviser who specialises in the area where the person needs advice. Very good it is too.
Last year the website had 338,000 enquiries, which it was able to channel towards a suitable IFA. IFAP's research shows that some £31m has been generated in commission income for IFAs up to the end of 2003 using these leads.
IFAP covers 96 per cent of the IFA market, of whom 77 per cent are online. But here is the nub of the problem, only 47 per cent of IFAs have a website. Why? There is plenty of software available for only a few hundred pounds, that allows IFAs to set up their own website.
It may not be a sophisticated website for that price, but at least it is a presence on the internet.
Research shows that the ability to buy online is becoming a significant factor for consumers looking to purchase a financial product, particularly for general insurance and increasingly for mutual funds. Customers like it and use it. They want to compare prices, get quotes and see what is available.
IFAP researched into why 53 per cent of IFAs, who are clearly computer literate, since 77 per cent are on line, do not have a website. The answer it received was that IFAs are afraid they would be “swamped with calls”.
What is the matter with these people? Do they not want new business? The importance of a website is easily demonstrated. Would be investors who use the IFAP website are given the names of suitable IFAs in their area.
For those advisers who have not looked at www.unbiased.co.uk, the website sorts IFAs by distance from the client's postcode. But which one will the potential investor pick? The chances are that it will be one of those IFAs who has a website where the client can look at the services offered, find out more about the company and the expertise of its consultants.
Moreover, it says a lot about an adviser if they have not yet entered the 21st Century and splashed out on a website.
Would you use an IFA who is clearly such a Luddite? Probably not. There is no doubt that those IFAs who have a website will attract much more business from the IFAP site than those who do not.
People who use the internet do so because they find it more convenient. Many only have time to deal with their personal finances in the evenings or at weekends. And like it or not, there is a large proportion of the population who do not want face-to-face contact when it comes to money.
The high-street banks learned this the hard way when they introduced ATMs following a series of bank strikes in the seventies. They discovered that customers preferred to queue in the rain to obtain cash, rather than come into the branch and face a uninterested, unmotivated clerk. As a result, they now have to get up to all sorts of promotional tricks to encourage customers back into the branches, so they can sell them a more profitable service than current account banking.
Of course, it could be that with the average age of IFAs around 55, there is a large proportion of firms that genuinely do not want new business and are happy to chug along with what they have.
But it is much more likely that it is laziness, or a fear of technology, which is deterring the majority of IFAs from making the most of the huge possibilities of the internet. Firms which refuse to modernise and get a website are likely to be left behind.